“Food and beverages”, one of 12 groups of goods and services surveyed by the Statistical Center of Iran for calculating the inflation, registered an average annualized inflation rate of 60.1% in the current Iranian year’s seventh month (Sept. 23-Oct. 22).
The group’s month-on-month and year-on-year inflation rates were reported at 2.2% and 71.4% respectively, new data released by the Statistical Center of Iran show.
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%, “housing and 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%.
SCI said the average annualized inflation in the month ending Oct. 22 stood at 42.9%.
This is the fifth consecutive month the annualized inflation is rising after the government put into effect what it touted as economic “surgery” by abolishing years of heavily subsidizing essential goods imports.
The general goods and services Consumer Price Index (using the Iranian year to March 2017 as the base year) stood at 541 in the month under review, indicating a month-on-month rise of 3% and a year-on-year rise 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” with 1% month-on-month.
“Hotels and restaurants” with 81% and “communications” with 10.3% saw the highest and lowest YOY inflation respectively.
CPI hit 532 for urban households and 591.5 for rural households, indicating a month-on-month increase of 3.2 and 2%, respectively.
SCI put the annualized inflation for urban and rural areas at 42.3% and 46.2%, respectively.
The year-on-year inflation stood at 47.7% for urban areas and 53.2% for rural areas in the month.
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 essential goods.
Also known as necessity or basic goods, essential goods are products consumers will buy, regardless of changes in income levels.
In fact, the prices of all commodities and services have also risen suddenly in a ripple effect.
Price Changes in 53 Food Products
The Statistical Center of Iran has published the price changes of 53 food products in a new report during the month under review.
The biggest month-on-month price rise for a food item in urban areas was recorded for watermelon with 14.1%, which was sold for 68,738 rials (19 cents) per kilogram.
The second and third biggest month-on-month price increase during the period under review was registered for Persian melon with 13.2% and eggs with 8.3%. The former was sold at 150,216 rials (41 cents) per kilogram while the latter went for 485,951 rials ($1.34) per kilogram.
Thirteen out of 53 food items examined by SCI experienced a price decline in the seventh fiscal month compared with the previous month: Pomegranate with 11%, carrot with 9.3%, apple with 4.5%, orange with 4.5, hydrogenated oil with 2.9%, vegetable oil with 2.4%, eggplant with 2.4%, split pea with 2.4%, peaches with 0.9%, sugar cubes with 0.7%, onion with 0.6%, sugar with 0.5% and yogurt with 0.3% were sold for 293,354 rials (81 cents), 110,466 rials (30 cents), 282,804 rials (78 cents), 293,306 rials (81 cents), 772,806 rials ($2.14), 691,426 rials ($1.92), 137,763 rials (38 cents), 589,474 rials ($1.63), 316,700 rials (87 cents), 342,222 rials (95 cents), 109,676 rials (30 cents), 358,205 rials (99 cents) and 327,094 rials (90 cents), respectively.
Compared with the same month of the previous year, the retail prices of vegetable oil increased by 289.1%, registering the highest year-on-year price rise. It was sold at 691,426 rials ($1.92) per 900 grams.
The second and third biggest year-on-year price rise was registered for hydrogenated oil with 265.4% and potato with 153.2%. A kilo of hydrogenated oil was sold at 772,806 rials ($2.14) and a kilo of potato went for 177,230 rials (49 cents).
