The average annual inflation gap measured by the Statistical Center of Iran among income deciles stood at 7.9% in the seventh month of the current Iranian year (Sept. 23-Oct. 22), up 0.1 percentage points compared to the previous month.
The inflation gap in “food, beverages and tobacco” group among income deciles grew by 0.7 percentage points and that of “non-food and services” group increased by 0.5 percentage points compared with the previous month.
The average goods and services Consumer Price Index in the 12-month period ending Oct. 22 increased by 48.7% for the first decile (those with the lowest income) and grew by 40.8% for the 10th decile (those with the highest income).
The annual inflation of “food, beverages and tobacco” stood at 62.4% for the first decile and 59.4% for the 10th decile. “Non-food and services” inflation was reported at 32.6% for the first decile and 36% for the 10th decile.
Average annual inflation rates stood at 47.2% for the second decile compared with last year’s corresponding period; 45.7% for the third decile; 45% for the fourth; 44.1% for the fifth; 43.5% for the sixth; 42.8% for the seventh; 42% for the eighth and 41.5% for the ninth decile.
The highest overall CPI (using the Iranian year to March 2017 as the base year) stood at 575.9 for the second decile and the lowest was 542.1 for the eighth decile.
The first and second deciles each saw a month-on-month inflation of 2.7%, the third and fourth deciles each registered 2.8%, the fifth, sixth, seventh and ninth deciles each registered 2.9%, and the eighth and the 10th deciles each registered 3%.
The year-on-year inflation rates stood at 57.7% for the first decile, 55.5% for the second, 53.5% for the third, 52.4% for the fourth, 51.1% for the fifth, 50.2% for the sixth, 48.9% for the seventh, 47.4% for the eighth and 46.1% for the ninth and 43.6% for the 10th decile.
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, rather 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 has led to a dramatic rise in the prices of basic goods. In fact, the prices of all commodities and services have risen suddenly in a ripple effect.
