Inflation 39.2%, SCI Says

Annualized inflation reported on a monthly basis by the SCI was the sixth consecutive month of decline. The SCI had put  the average annual inflation rate for the preceding Iranian month, ended March 20, at 40.2%. 

Consumer price inflation for the month under review (March 21-April 20) jumped 35.6% over the same month in the previous calendar year while y/y inflation in the month ending March 20 was 34.7%. 

Overall CPI (using the Iranian year to March 2017 as the base year) stood at 415 for the month ending April 20, indicating a 3.3% rise on the month before. Month-on-month consumer inflation was 1.3% in the preceding month.

The SCI put average inflation for urban and rural areas at 38.7% and 41.6%, respectively. The CPI registered y/y increase of 35.2% for urban areas and 37.2% for rural areas in the month. 

Overall CPI reached 409.4 for urban households and 446.5 for rural households, indicating a month-on-month increase of 3.2% and 4%, respectively.

The highest and lowest monthly growth in the index among 12 groups of the basket of consumer goods and services purchased by households in the Iranian month ending March 20 was recorded for food and beverages, hotels and restaurants and miscellaneous goods and services with 4.8% each and education at 0.4% month-on-month. 

The highest y/y inflation in the month under review was logged for hotels and restaurants with 55.2% while the lowest Y/Y inflation was for communications with 4.6%. 

The highest and lowest annualized inflation rates were registered for hotels and restaurants with 61.9% and communications 5.5%. 

 

Food and Beverages

With a coefficient of 26.64%, the CPI for food and beverages stood at 569.3 in the month to April 20, indicating a 4.7% increase on the previous month. The index registered y/y increase of 43.4% and the CPI of the group increased by 50.8% in the 12-month period to April 20 year-on-year.  

 

Tobacco

The CPI for tobacco was 637.8, indicating a 2.8% rise from  the month before. The tobacco index, which has the least impact on the total inflation rate with a coefficient of 0.59%, registered y/y increase of 40.9%. Annualized CPI of the group grew 37.3% compared with the corresponding period the year before.

 

Clothing and Shoes

With a coefficient of 4.78%, the CPI for clothing and shoes was reported at 496.7, indicating a 2.4% increase on the earlier month. This index registered y/y increase of 44.9% in the month under review. Average annual CPI of the group jumped 50% from last year. 

 

Housing and Utilities

The CPI of “housing and utilities (water, electricity, natural gas and other fuels)” stood at 280.7, indicating a 2% rise compared with the month before. The group’s CPI index, which has the biggest impact on the total inflation rate with a coefficient of 35.5%, registered a year-on-year increase of 28%. Annualized CPI of the group was at 26.7%. 

 

Home Appliances, Furniture and Maintenance 

With a coefficient of 3.93%, the CPI for furniture, home appliances and their maintenance was 537.6 – up 1.6% on the previous month. The group’s CPI registered y/y increase of 28.9% while the average annual CPI of the group increased 43.2% over last year. 

 

Health and Medical Treatment 

The CPI of health and medical treatment was 320.9, indicating a 2.1% increase from the month before. This index, with a coefficient of 7.14%, registered an increase of 30.3% compared to the similar month last year. The group’s annual inflation during the month was 37.4%.

 

Transportation

With a coefficient of 9.41%, the transportation CPI was 526, up 3.3% on the month before. This index registered y/y increase of 36.3% and its annualized CPI increased 36.4%.

 

Communications

The CPI of communications stood at 190.6 – up 0.1% on the month before. With a coefficient of 2.87%, it showed y/y increase of 4.6% with the annualized inflation at 5.5%. 

 

Leisure and Culture

The leisure and culture CPI stood at 509.2, indicating a 2.2% rise on the earlier month. With a coefficient of 1.65%, it saw y/y increase of 27.8% with annualized inflation near 37.7%.

 

 

Education

With a coefficient of 1.86%, the CPI for education was 271.7, indicating a 0.4% rise from the month before. The group’s CPI index registered y/y increase of 27.3% while the annualized CPI of the group shot up 25.5%. 

 

Hotels and Restaurants 

The hotels and restaurants CPI came in at 477.3 – up 4.7% over the previous month. With a coefficient of 1.44%, the y/y  increase was 55.2% and annualized inflation was 61.9%.

 

Miscellaneous Goods and Services

The CPI of goods and services in the miscellaneous group was 447.8, indicating a 4.7% growth compared to the month before. With a coefficient of 4.18%, this index was up 30.7% and its average annual inflation hovered near 38.8%.

 

Highest Inflation Over the Past Decade 

The Economic Studies Department of Tehran Chamber of Commerce, Industries, Mines and Agriculture in a review of the decade to fiscal 2021-22 said the country saw the highest inflation in the year at 40.2%.

Citing data from the Statistical Center of Iran and the Central Bank of Iran, the survey showed single-digit inflation was logged in only four years from fiscal 1978-79 to fiscal 2021-22 (44 years since the revolution).

Over the years numbers reported by the SCI and CBI on inflation tend to be incompatible. 

After fiscal 1995-96 with an inflation rate of 49.4%, fiscal 2021-22 was the second year that saw the economy with an inflation rate above 40%.

Given that the CBI-reported inflation in fiscal 2019-20 was 41.2%, the economy suffered inflation over and above 40% in three years and between 30%-40% in two years.

In the 12th month of fiscal 2021-22 (Feb. 20-March 20), the rate of monthly changes in the price index of consumer goods and services of households reached 1.3%, which was down over the previous month.

Year-on-year inflation in the month under review was 34.7% and during the 12 months to March 20 40.2%.

Inflation for rural households in fiscal 2021-22 was 42.8% and 39.7% for urban regions. 

A breakdown of major groups shows the food and beverages group was the biggest contributor to inflation in fiscal 2021-22with 16.7 percentage points followed by housing and utilities (water, electricity, natural gas and other fuels) with 6.6 percentage points, transportation 4.5 percentage points, clothing and shoes 2.7 percentage points, furniture, home appliances and their maintenance 2.4 percentage points and health and treatment 2.2 percentage points.

Prices rises in the energy group (water, electricity and fuel) in fiscal 2021-22 compared to the previous year was 24.5% and its share in inflation 0.7 percentage points. 

The lowest increase in the CPI in 2021-22 was for the communication services group with 6.4 percent. The lowest share of inflation was also in this group with 0.12 percentage points.

In the food and beverage sector, three commodity groups, namely bread and cereals, red meat and poultry, and vegetables, together accounted for about 50% of the 16.74 percentage point share of the inflation in March 2021-22.

As for classification in terms of durability, the highest contribution to inflation was from non-durable goods with 21.4 percentage points.