Services PPI Inflation Hits Record High of 46.3% in Q3

The average Producer Price Inflation for the services sector in the four-quarter period ending Dec. 21, which marks the end of the third quarter of the current Iranian year, increased by 46.3% compared with the same period of the year before.

According to the Statistical Center of Iran, this marks the highest annual inflation since winter 2013 (the earliest available data on services producers' inflation on SCI’s website). 

The overall PPI for the services sector stood at 394.6 in Q3 of the current fiscal year (Sept. 23-Dec. 21), indicating a 10% increase compared with the preceding quarter. 

The index indicates a 45.8% increase compared with the same quarter of the year before.

The services PPI is calculated based on the indexes of 13 subsectors, namely “water networks, wastewater management and wastewater treatment” with a coefficient of 1.2%, “repairing motor vehicles and motorcycles” with 2.8%, “transportation and warehouse services” with 23.2%, “services related to accommodation and food” with 4.8%, “information and communications” with 8.5%, “insurance services” with 1.7%, “real-estate services” with 26.8%, “professional, scientific and technical activities” with 3%, “administrative and support services” with 1.7%, “education” with 9.3%, “social services” with 14.2%, “art, entertainment and leisure” with 1.1% and “services categorized as others” with 1.8%. 

For “water networks, wastewater management and wastewater treatment”, PPI stood at 219.5 in Q3, indicating a respective increase of 7.2% and 32.7% compared with the previous quarter and the same quarter of the year before. The average annual PPI for the subsector in the four-quarter period ending Dec. 21 increased by 20.5%.  

PPI for “repairing motor vehicles and motorcycles” stood at 621.8, indicating a 9.5% rise compared with the previous quarter and a 54.9% growth compared with the same quarter of the year before. The average PPI for the subsector in the four-quarter period ending Dec. 21 surged by 63.1%.  

The index for “transportation and warehouse services” stood at 456.5, posting an 8.2% rise quarter-on-quarter and a 47.7% rise year-on-year. The average annual PPI for the subsector in the four-quarter period jumped by 53.9%.  

For “services related to accommodation and food”, PPI stood at 845.8, registering a 16.9% increase QOQ and an 85.2% increase YOY. The average annual PPI for the subsector in the four-quarter period increased by 82.5%.  

For “information and communications”, it stood at 257.3, indicating a 6.3% rise compared with the previous quarter and a 25.2% increase compared with the same quarter of the year before. The average annual PPI for the subsector in the four-quarter period increased by 24.2%.  

“Insurance services” saw the PPI stand at 248.4, registering a 6.7% rise QOQ and a 50.5% increase YOY. The average annual PPI for the subsector in the four-quarter period increased by 36.5%.  

For “real-estate services”, the index was at 233, posting a 7.4% rise compared with the previous quarter and a 24% increase compared with the same quarter of the year before. The average annual PPI for the subsector in the four-quarter period increased by 24.8%.   

“Professional, scientific and technical activities” had a PPI of 312.8, indicating a 6.8% rise over the preceding quarter and a 30.6% increase over the same quarter of the year before. The average annual PPI for the subsector in the four-quarter period increased by 37.4%.  

The PPI measured for the subsector of “administrative and support services” stood at 698.3, showing a 10.9% growth compared with the previous quarter and a 62.6% increase over the same quarter of the year before. The average annual PPI for the subsector in the four-quarter period increased by 70.9%.   

“Education” recorded a PPI of 341.3, indicating a 22.5% rise over the preceding quarter and a 34.2% increase over the same quarter of the year before. The average annual PPI for the subsector in the four-quarter period increased by 31.1%.  

For “social services”, PPI stood at 514.1, indicating an 8.5% rise compared with the previous quarter and a 58.3% increase compared with the same quarter of the year before. The average annual PPI for the subsector in the four-quarter period increased by 55%.  

“Art, entertainment and leisure” had a PPI of 412.8, indicating a 9.4% rise over the preceding quarter and a 48.7% increase over the same quarter of the year before. The average annual PPI for the subsector in the four-quarter period increased by 44.9%.  

And, “services categorized as others” registered a PPI of 412.8, indicating a 9.4% rise over the preceding quarter and a 48.7% increase over the same quarter of the year before. The average annual PPI for the subsector in the four-quarter period increased by 52.3%. 

The PPI measures price movements from the seller's point of view. Conversely, the consumer price index measures cost changes from the viewpoint of the consumer. In other words, this index tracks changes to the cost of production.

The importance of PPI lies in its predictive content for the future pattern of Consumer Price Index. Changes in PPI are usually reflected in CPI within a short period of time.