‘Hotels and Restaurants’ Register Highest Inflation With 82 Percent

“Hotels and Restaurants”, one of 12 groups of goods and services surveyed by the Statistical Center of Iran, registered an annualized inflation rate of 82% in the third month of the current Iranian year (May 22-June 21).
This is the highest year-on-year rise among the groups surveyed.
The year-on-year and month-on-month inflation of this group stood at 62.5% and 6.2% respectively. The YOY rate was also the highest of all.
The average annualized inflation in the third month of the current Iranian year stood at 48.5%, down from 49.1% in the previous month, the Statistical Center of Iran said in a new report released on Wednesday.
This is the first time in a year’s time the inflation has registered a fall, as indicated in SCI’s monthly report.
The general goods and services Consumer Price Index (using the Iranian year to March 2022 as the base year) stood at 189.3 in the month under review, indicating a month-on-month rise of 2% and a year-on-year rise of 42.6%.
CPI hit 187.9 for urban households and 197.8 for rural households, indicating a month-on-month increase of 2.1 and 1.8%, respectively.
SCI put the annualized inflation for urban and rural areas at 47.7% and 53.3%, respectively. The year-on-year inflation stood at 42.5% for urban areas and 43.2% for rural areas in the month.
Notably, in the current Iranian year that started March 21, the SCI changed the base year for the CPI from the fiscal 2016-17 to the fiscal 2021-22 in five-year updates, as the expenditure weights used to calculate CPI change over time.
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 parity rate of 42,000 rials, 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 just below 500,000 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.