The inflation rate broke all previous records and reached the highest rate with the point-to-point rate now at the highest level in the last 79 years.
This implies that a wide range of problems, shortages and damages have befallen deprived families and the middle class, the effects of which are overshadowing state affairs. Basically, this type of inflation acts as a driver of the annualized inflation, economist Mohammad Reza Monjazab prefaced an article for the Persian newspaper Ta’adol with this note. The translation of the full text follows:
Forecasts show that this year's inflation will be the highest since World War II. The negative effects of inflation on the spread of poverty and the unfair distribution of income and wealth have become more apparent in Iran's economy.
According to the official graphs released by the Central Bank of Iran, the point-to-point inflation rate in Farvardin, 1372 [the first month of the fiscal 1993-94] was about 20%; the figure jumped to around 40% in the seventh month of the following year.
In one of the peaks of point-to-point inflation, it reached 59.1% in the third month of the following year. This high rate of inflation was the result of adjustment policies implemented during the Construction Government [referring to the presidency of Ali Akbar Hashemi Rafsanjani from 1989 to 1997].
Of course, the inflation rate was on the rise in the fiscal 1994-95 and was contained in a short period of time. This inflationary peak is different from the high and continuous inflation experienced in recent years. Subsequently, the inflation rate began to downtrend and reached 55% in first month of the fiscal 1996-97 and 30% in the 10th month of the fiscal 1997-98.
With the advent of the Reformist Government [referring to Mohammad Khatami’s presidency], the downtrend of inflation stabilized. In the 10th month of 1997-98, the inflation rate reached 12%. This trend continued and from the fiscal 1997-98 to 2005-6, the inflation rate fluctuated between 12% and 14%. The presence of the Principlist Government [referring to Mahmoud Ahmadinajad’s presidency] at the top of the management pyramid and the change of strategic policies shaped a different trend in the inflation rate. In the fiscal 2005-06, when the inflation rate reached below 10%, it immediately started to rise in a way that it reached 29.2% in the seventh month of 2008-09 and 45% in the third month of 2013-14 before the coming to power of the Government of Hope and Prudence [referring to Hassan Rouhani’s presidency].
After the fiscal 2013-14, two periods can be seen regarding the inflation rate: before the US withdrawal from the Iran Nuclear Agreement known as the Joint Comprehensive Plan of Action (JCPOA) and after. As of the fiscal 2014-15, the inflation rate started its downtrend in the government of Hassan Rouhani.
In the fiscal 2014-15, the inflation was around 12% and the Iranian economy witnessed two years of single-digit inflation. But the US withdrawal from JCPOA and escalation of anti-Iran sanctions created inflationary fluctuations.
In the second month of 2019-20, the inflation rate reached 60.2% and in the last month of 2021-22, it hit 65.2%. The Rouhani government had an opportunity to revive JCPOA, but due to various reasons, this opportunity was lost for Iran's economy and was postponed to the future.
During this period, the inflation rate decreased due to the resumption of negotiations for a short period. But after Ebrahim Raisi took office as president in the fiscal 2021-22 and promised to reduce the inflation rate by half, not only the inflation did not decrease point to point, but also broke all previous records.
The point-to-point inflation rate reached 68.6% in the first month of 2022-23. This is the peak of inflation in Iran's economy, and no government has ever experienced such a point-to-point inflation rate. Unfortunately, this rising trend is continuing, despite all the denials of the government, in such a way that according to the Majlis Research Center, Iranians are experiencing an inflationary perception that exceeds 86%. Moving toward lifting sanctions and establishing principled interactions with the world economies are considered one of the primary ways to limit inflation, provided the statesmen know and attempt to realize it.
