“Food and beverages”, one of the 12 groups of goods and services surveyed by the Statistical Center of Iran, registered an average annualized inflation rate of 61.8% in the eighth month of the current Iranian year (Oct. 23-Nov. 21).
The group’s month-on-month and year-on-year inflation rates reached 1.3% and 68.4% 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%.
The general average annualized inflation in the month to Nov. 21 stood at 44%, according to SCI.
This is the sixth consecutive month the annualized inflation is rising after the government put into effect what it touted as “economic surgery” by abolishing the heavily subsidized import of essential goods.
The general goods and services Consumer Price Index (using the Iranian year to March 2017 as the base year) stood at 552.4 in the month under review, indicating a month-on-month rise of 2.1% and a year-on-year rise of 48.1%.
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 72.5% and “communications” with 7.2%.
The highest MOM inflation rates were respectively registered for “health and medical treatment” at 4% and “communications” at 0.9% month-on-month.
“Hotels and restaurants” with 79.3% and “communications” with 10.2% saw the highest and lowest YOY inflation rates respectively.
CPI hit 543.2 for urban households and 603.7 for rural households, indicating a month-on-month increase of 2.1% and 2.1%, respectively.
SCI put the annualized inflation for urban and rural areas at 43.3% and 47.4%, respectively.
The year-on-year inflation stood at 47.3% for urban areas and 52.3% for rural areas in the month.
The rise in prices of goods and services accelerated at an unprecedented pace, ever since 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 350,000 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. 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.
Price Changes of 53 Food Products Reviewed
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 tomato with 14.1%, which was sold for 138,868 rials (38 cents) per kilogram.
The second and third biggest month-on-month price increase during the period under review was registered for onion with 15.5% and lemon with 7.8%. Onion was sold at 126,694 rials (35 cents) per kilogram and lemon went for 278,518 rials (77 cents) per kilogram.
Fourteen out of 53 food items examined by SCI experienced a price decline in the eighth fiscal month compared with the previous month:
Orange with 4.5%, eggplant with 2.4%, pomegranate with 11%, zucchini with 5.5%, potato with 2.9%, carrot with 2.2%, hydrogenated oil with 1.9%, sugar with 0.9%, vegetable oil with 0.7%, chicken with 0.5%, split pea with 0.4%, lentil with 0.3%, macaroni with 0.2% and sugar cube with 0.1% were sold for 244,936 rials (68 cents), 126,996 rials (35 cents), 273,110 rials (75 cents), 136,795 rials (37 cents), 172,054 rials (47 cents), 108,065 rials (30 cents), 758,263 rials ($2.1), 255,830 rials (71 cents), 686,447 rials ($1.9), 647,568 rials ($1.78), 586,914 rials ($1.63), 608,592 rials ($1.69), 175,281 rials (48 cents) and 341,938 rials (94 cents), respectively.
Compared with the same month of the previous year, the retail prices of vegetable oil increased by 287.9%, registering the highest year-on-year price rise. It was sold at 686,447 rials ($1.9) per 900 grams.
The second and third biggest year-on-year price rise was registered for hydrogenated oil with 273.6% and macaroni with 134.3%. A kilogram of hydrogenated oil was sold at 758,263 rials ($2.1) and 500 grams of macaroni went for 175,281 rials (48 cents).
