The Statistical Center of Iran’s latest survey of the country’s 31 provinces shows Khuzestan posted the lowest average annual inflation with 42.7% while West Azarbaijan registered the highest with 53.1% in the current Iranian year’s 10th month (Jan. 21-Feb. 19).
The overall average goods and services CPI in Iran over the 12-month period ending Feb. 19 increased by 47.7% compared with the preceding year’s corresponding period.
The annualized inflation reported by SCI on a monthly basis has reached a new high. Only in the fiscal 1995-96 and 1996-97 did the country experience inflation rates above the current level. This is the ninth 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.
On a month-on-month basis, the growth in CPI was the highest (6%) in Chaharmahal-Bakhtiari Province, while Kohgilouyeh-Boyerahmad Province posted the lowest (2%).
The overall CPI, using the Iranian year to March 2017 as the base year, stood at 608 in the month ending Jan. 20, indicating a 3.5% rise compared with the previous month.
The year-on-year inflation for Sistan-Baluchestan was reportedly 67.9%, the highest among all provinces. The year-on-year CPI growth was the lowest for Bushehr Province with 48.6%.
The overall goods and services Consumer Price Index in Iran saw a year-on-year increase of 53.4%.
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 76.4% and “communications” with 9.8%.
The highest and lowest MOM inflation rates were respectively registered for “food and beverages” with 4.8% and “education” with 0.5% month-on-month, respectively.
“Hotels and restaurants” with 78.9% and “communications” with 15.3% registered the highest and lowest YOY inflation respectively.
CPI hit 598.3 for urban households and 662.3 for rural households, indicating a month-on-month increase of 3.4% and 4%, respectively.
SCI put the annualized inflation for urban and rural areas at 46.9% and 51.7%, respectively. The year-on-year inflation stood at 52.7% for urban areas and 56.7% 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 480,000 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.
Urban Areas
The overall CPI calculated for urban areas stood at 598.3 during the 11th month of the current Iranian year, indicating a 3.4% rise compared with the previous month.
The growth in CPI measured for provincial urban households compared with the previous month was highest (5.8%) for Chaharmahal-Bakhtiari while Kohgilouyeh-Boyerahmad recorded the lowest monthly inflation rate with an increase of 1.9% compared with other provinces.
The index registered a year-on-year increase of 52.7% for urban areas. Goods and services CPI of Sistan-Baluchestan’s urban areas registered a year-on-year rise of 63% during the month under review, the highest among all provinces. The CPI increase in urban areas was the lowest for Bushehr with 46.2% YOY.
The average CPI in urban areas for the month under review increased by 46.9% compared with the same period of last year. Households living in the urban areas of Lorestan experienced the highest annual inflation (with 52.1%) while those of Bushehr witnessed the lowest annual inflation (41.1%) among all Iranian provinces.
Rural Areas
The overall CPI calculated for rural areas stood at 662.3 in the month under review, which indicates a 4% increase compared with the previous month.
The growth in CPI of rural households compared with the previous month was highest for Qom with 6.8%. This is while rural households living in Sistan-Baluchestan Province witnessed a 1.9% growth.
The index registered an average year-on-year increase of 56.7% for rural areas in the same month. CPI of Sistan-Baluchestan Province’s rural areas registered a YOY increase of 78.7% during the 11th month of the Iranian year, the highest among all provinces, whereas the year-on-year CPI increase was the lowest for Gilan with 49.2%, compared with other provincial rural areas.
The average goods and services CPI of rural areas in the month under review increased by 51.7% year-on-year.
Sistan-Baluchestan registered the highest annual inflation in rural areas (58.4%) while Khuzestan posted the lowest annual inflation rate (45.4%).
Tehran Province
The average goods and services CPI in the 12-month period ending Feb. 19 for Tehran Province, wherein lies the capital city, increased by 45.5% compared with the corresponding period of last year.
SCI had put Tehran’s average annual inflation rate for the preceding Iranian month, which ended on Jan. 20, at 44.2%.
The consumer inflation for the month under review registered an increase of 50.5% year-on-year while it was 48.4% in the preceding month.
CPI (using the Iranian year to March 2017 as the base year) of Tehran Province stood at 600.7 in the month ending Feb. 19, indicating a 3.1% rise compared with the month before. Month-on-month consumer inflation was 4.2% for the preceding month.
SCI put Tehran Province’s urban and rural 12-month inflation rates for the month under review at 45.4% and 47.3%, respectively.
CPI registered a year-on-year increase of 50.5% for urban areas and 51.3% for rural areas in the month under review.
The overall CPI reached 600.4 for urban households and 612.9 for rural households, indicating a month-on-month increase of 3.1% for urban areas and 2.5% for rural areas.
