The Statistical Center of Iran’s latest survey of the country’s 31 provinces shows Kohgilouyeh-Boyerahmad registered the highest average annual inflation with 48.2% while Khuzestan posted the lowest with 38.4% in the current Iranian year’s sixth month (Sept. 23-Oct. 22).
The average goods and services CPI in Iran for the 12-month period ending Oct. 22 increased by 42.9% compared with the preceding year’s corresponding period.
On a month-on-month basis, the growth in CPI was the highest (4%) in Alborz Province, while Khuzestan Province posted the lowest (1.9%).
The overall CPI, using the Iranian year to March 2017 as the base year, stood at 541 in the month ending Oct. 22, indicating a 3% rise compared with the previous month.
The year-on-year inflation for Sistan-Baluchestan was reportedly 57.8%, the highest among all provinces. The year-on-year CPI growth was the lowest for Bushehr Province with 42.4%.
The overall goods and services Consumer Price Index in Iran saw a year-on-year increase of 48.6%.
Among 12 groups of goods and services reviewed by SCI, the highest and lowest annualized inflation rates were respectively registered for “hotels and restaurants” with 71.1% and “communications” with 6.5%.
The highest MOM inflation rates were respectively registered for “education” with 15% and “communications” at 1% month-on-month.
“Hotels and restaurants” with 81% and “communications” with 10.3% saw the highest and lowest YOY inflation respectively.
The 12 groups of the basket of consumer goods and services surveyed by SCI include "food and beverages" with a coefficient of 26.64%, "tobacco" with 0.59%, "clothing and shoes" with 4.78%, "utilities" with 35.5% (highest), "furniture, home appliances and their maintenance" with 3.93%, "health and treatment" with 7.14%, "transportation" with 9.41%, "communications" with 2.87%, "leisure and culture" with 1.65%, "education" with 1.86%, "hotels and restaurants" with 1.44% and "miscellaneous items and services" with 4.18%.
Urban Households
The overall CPI calculated for urban areas stood at 532 during the seventh month of the current Iranian year, indicating a 3.2% rise compared with the previous month.
The growth in CPI measured for provincial urban households compared with the previous month was highest (4.3%) for Qazvin while Bushehr recorded the lowest monthly inflation rate with an increase of 2.1% compared with other provinces.
The index registered a year-on-year increase of 47.7% for urban areas. Goods and services CPI of Ilam’s urban areas registered a year-on-year rise of 56.3% during the month under review, the highest among all provinces. The CPI increase in urban areas was the lowest for Bushehr with 40.1% YOY.
The average CPI in urban areas for the month under review increased by 42.3% compared with the same period of last year. Households living in the urban areas of Mazandaran experienced the highest annual inflation (with 47.4%) while those of Khuzestan witnessed the lowest annual inflation (38%) among all Iranian provinces.
Rural Households
The overall CPI calculated for rural areas stood at 591.5 in the month under review, which indicate a 2% increase compared with the previous month.
The growth in CPI of rural households compared with the previous month was highest for Sistan-Baluchestan with 5.3%. This is while rural households living in Khuzestan province saw the lowest growth with 0.5%.
The index registered an average year-on-year increase of 53.2% for rural areas in the same month. CPI of Sistan-Baluchestan Province’s rural areas registered a YOY increase of 65.9% during the seventh month of the Iranian year, the highest among all provinces, whereas the year-on-year CPI increase was the lowest for Yazd and Khuzestan with 46.1%, compared with other provincial rural areas.
The average goods and services CPI of rural areas in the month under review increased by 46.2% year-on-year.
Qazvin registered the highest annual inflation in rural areas (51.6%) while Hamedan posted the lowest annual inflation rate (39.9%).
Tehran Province
The average goods and services CPI in the 12-month period ending Oct. 22 for Tehran Province, wherein lies the capital city, increased by 41.2% compared with the corresponding period of last year.
SCI had put Tehran’s average annual inflation rate for the preceding Iranian month, which ended on Sept. 22, at 40.3%.
The consumer inflation for the month under review registered an increase of 45.9% year-on-year while it was 46% in the preceding month.
CPI (using the Iranian year to March 2017 as the base year) of Tehran Province stood at 532.4 in the month ending Oct. 22, indicating a 3.2% rise compared with the month before. Month-on-month consumer inflation was 2.5% for the preceding month.
SCI put Tehran Province’s urban and rural 12-month inflation rates for the month under review at 41.2% and 42.7%, respectively.
CPI registered a year-on-year increase of 45.8% for urban areas and 48.6% for rural areas in the month under review.
The overall CPI reached 531.8 for urban households and 555.1 for rural households, indicating a month-on-month increase of 3.2% for urban areas and 1.9% for rural areas.
Impact of Import Subsidy Abolition
The rise in prices of goods and services accelerated at an unprecedented pace after the government decided to overhaul the import subsidy system.
The government move saw the abolition of the controversial practice of allocating cheap dollars at the rate of 42,000 rials per dollar, locally known as the Preferential Foreign Currency, to import essential goods, including corn, soymeal, unprocessed oil, oilseeds and barley, in addition to wheat, flour and medicine.
The market value of the dollar is currently above 300,000 rials.
“Until now, we have been paying to producers [read importers] but now the subsidies go to consumers. In fact, the Preferential Foreign Currency has not been ceased; the allocation method has changed,” President Ebrahim Raisi said in a televised speech on the eve of the introduction of the move in May.
In his speech, Raisi emphasized that the removal of cheap dollar allocation will not lead to a price rise in wheat, flour and medicine.
However, the move led to a dramatic rise in the prices of essential goods. In fact, the prices of all commodities and services have also risen suddenly in a ripple effect.
Also known as necessity or basic goods, essential goods are products consumers will buy, regardless of changes in income levels.
