The average annual inflation gap measured by the Statistical Center of Iran among income deciles stood at 9.2% in the ninth month of the current Iranian year (Nov. 22-Dec. 21), up 0.7 percentage points compared to the previous month.
The inflation gap in “food, beverages and tobacco” group among income deciles grew by 0.4 percentage points and that of “non-food and services” group declined by 0.1 percentage points compared with the previous month.
The average goods and services Consumer Price Index in the 12-month period ending Dec. 21 increased by 51.7% for the first decile (those with the lowest income) and grew by 42.5% for the 10th decile (those with the highest income).
The annualized inflation of “food, beverages and tobacco” stood at 66.7% for the first decile and 62.5% for the 10th decile. “Non-food and services” inflation was reported at 33.6% for the first decile and 37.1% for the 10th decile.
Average annual inflation rates stood at 49.9% for the second decile compared with last year’s corresponding period; 48.3% for the third decile; 47.4% for the fourth; 46.4% for the fifth; 45.8% for the sixth; 45% for the seventh; 44% for the eighth and 43.5% for the ninth decile.
The highest overall CPI (using the Iranian year to March 2017 as the base year) stood at 592 for the second decile and the lowest was 565.1 for the eighth decile.
The first decile saw a month-on-month inflation of 0.9%, the second decile registered 1%, the third and fourth deciles each saw a month-on-month inflation of 1.2%, fifth decile registered 1.4%, the sixth decline was a 1.5% inflation, the seventh decile registered 1.8%, the eighth decile registered 2%, the ninth saw MOM inflation of 2.5% and the 10th decile registered 3.4%.
The year-on-year inflation rates stood at 51.7% for the first decile, 49.9% for the second, 48.3% for the third, 47.4% for the fourth, 46.4% for the fifth, 45.8% for the sixth, 45% for the seventh, 44% for the eighth, 43.5% for the ninth and 42.5% for the 10th decile.
Irrespective of income deciles, the average annualized inflation in the month under SCI review stood at 45%.
This is the seventh 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 563 in the month under review, indicating a month-on-month rise of 1.9% and a year-on-year rise of 48.5%.
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 73.9% and “communications” with 7.9%.
The highest and lowest MOM inflation rates were respectively registered for “health and medical treatment” with 8.8% and “food and beverages” with -0.1% month-on-month, respectively.
“Hotels and restaurants” with 78.5% and “communications” with 10.1% saw the highest and lowest YOY inflation respectively.
CPI hit 554.4 for urban households and 611 for rural households, indicating a month-on-month increase of 2.1 and 1.2%, respectively.
SCI put the annualized inflation for urban and rural areas at 44.3% and 48.6%, respectively.
The year-on-year inflation stood at 47.9% for urban areas and 51.4% 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 400,000 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.
