Economy, Domestic Economy

Economy Ministry: Q2 Inflation at 8.9%

Economy Ministry: Q2 Inflation at 8.9%Economy Ministry: Q2 Inflation at 8.9%

The Economy Ministry has forecast an 8.7% inflation rate for the Iranian month ending September 21 and 8.9% for the second quarter of the current Iranian year (started June 21).

Iran’s inflation has been steadily declining for the past three years since President Hassan Rouhani took office.

According to the ministry, low global inflation, fiscal and monetary discipline, dissipation of the effects of prior economic shocks (including the 2012-13 currency crisis and subsidy reforms), lower inflationary expectations brought about by political stability and the implementation of the nuclear deal between Iran and the West that ended a decade of sanctions, drop in producer price index, weak property market and low consumer demand are the main reasons for the drop in inflation.

Inflation in the 12 months ending June 20, which marks the end of the Iranian month of Khordad, dropped to 9.7%, the Central Bank of Iran reported. It was the first time inflation fell below the 10% mark in 26 years. The last time was in 1990 when Iran was emerging from the carnage of the Iraq-imposed war.

However, year-on-year inflation, considered by many as the canary in the coal mine for average inflation, has started rising since it bottomed at 6.8% in Khordad.

It has continuously gone up, hitting 9.4% for the month ending August 21, suggesting inflation may climb in the coming months.