“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 63.6% in the ninth month of the current Iranian year (Nov. 22-Dec. 21).
The group’s month-on-month and year-on-year inflation rates stood at -0.1% and 66% 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 Dec. 21 stood at 45%, according to SCI.
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 around 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.
Price Changes of 53 Food Products Reviewed
The Statistical Center of Iran published the price changes of 53 food products in urban areas of the country during the month under review in a new report released on Tuesday.
The biggest month-on-month price rise for a food item was recorded for onion with 25.4%, which was sold for 158,866 rials (38 cents) per kilogram.
The second and third biggest month-on-month price increase during the period under review was registered for watermelon with 16.5% and peach with 11%. watermelon was sold at 84,925 rials (21 cents) per kilogram and peach went for 365,848 rials (90 cents) per kilogram.
Sixteen out of 53 food items examined by SCI experienced a price decline in the ninth fiscal month compared with the previous month:
Orange with 13.9%, chicken with 11.8%, tomato with 4.4%, carrot with 2.7%, potato with 1.7%, lentil with 1.4%, split pea with 1.1%, sugar with 0.7%, yogurt with 0.5%, sugar cube with 0.5%, eggplant with 0.4%, lemon with 0.3%, pinto bean with 0.3%, macaroni with 0.2%, butter with 0.1% and hydrogenated oil with 0.1% were sold for 210,781 rials (52 cents), 571,460 rials ($1.41), 132,773 rials (32 cents), 105,175 rials (26 cents), 169,125 rials (41 cents), 599,846 rials ($1.48), 580,453 rials ($1.43), 254,150 rials (63 cents), 325,643 rials (80 cents), 340,155 rials (80 cents), 126,525 rials (31 cents), 277,560 rials (68 cents), 710,929 rials ($1.76), 174,976 rials (40 cents), 248,859 rials (61 cents) and 757,766 rials ($1.87), respectively.
Compared with the same month of the previous year, the retail prices of vegetable oil increased by 290.9%, registering the highest year-on-year price rise. It was sold at 696,900 rials ($1.72) per 900 grams.
The second and third biggest year-on-year price rise was registered for hydrogenated oil with 274.1% and macaroni with 138.4%. A kilogram of hydrogenated oil was sold at 757,766 rials ($1.87) and 500 grams of macaroni went for 174,976 rials (43 cents).
