Iran's CPI Inflation Hits 37.4% YOY

EghtesadOnline: The goods and services Consumer Price Index registered a year-on-year increase of 37.4% in the Iranian month Azar (Nov. 22-Dec. 21) compared with the similar month of last year, the Statistical Center of Iran's latest report shows.

News ID: ۷۴۶۳۷۲

24 December 2018

The overall CPI (using the Iranian year to March 2017 as the base year) stood at 151.7 in Azar, indicating a 2.6% rise compared with the previous month.

The report also shows the CPI Index in the 12-month period ending Dec. 21 increased by 18% compared with last year’s corresponding period.

SCI had put the inflation rate for the preceding Iranian month (Aban), which ended on Nov. 21, at 15.6%, according to Financial Tribune.

The center put the average 12-month urban and rural inflation for the month at 18%. The overall CPI reached 151 for urban households and 155.3 for rural households, indicating an increase of 2.5% and 3% respectively compared with the previous month.

The index registered a year-on-year increase of 36.9% for urban areas and 39.9% for rural areas compared with the similar month of last year.

Basket of Goods, Services

The report shows the highest inflation among 12 goods and services groups was recorded for the “food and beverages” group with a 5.1% rise compared with the month before.

The “tobacco” group saw a month-on-month deflation of 3.3% in prices among these groups.

The “tobacco” group registered the highest as the “health and treatment” group posted the lowest year-on-year CPI increase among the 12 groups of goods and services with 147.1% and 21.5% respectively.

The inflation rate for the “tobacco” group was the highest in the 12 months leading to Dec. 21 with 71.6% as that of the “health and treatment” group experienced the slowest annual inflation rate with 12.8%.

CPI-PPI Inflation Gap Widening

Analysts at Tehran Chamber of Commerce, Industries, Mines and Agriculture have noted that the gap between CPI inflation and that of Producer Price Index has been widening in recent months.

According to a recent TCCIM report, the PPI inflation rose to 63.3% in the Iranian month of Aban (Oct. 23-Nov. 21) year-on-year from 59% in the preceding month as the CPI inflation ticked up to 39.9% from 36.9%.

Depreciation of the Iranian rial against the US dollar has been one of the main drivers of the increase in PPI over the past months, but it seems that the impact of the rise in PPI on CPI have been controlled to some extent by other factors, including the government’s control on prices, according to the report.

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.

PPI gauges the price fluctuations of goods and services for the producer whereas CPI measures changes in the price level of a basket of consumer goods and services purchased by households.

In other words, PPI is an index of prices measured at the wholesale, or producer level. It shows trends within the wholesale markets (as it was once called the Wholesale Price Index), production sector, manufacturing industries and commodities markets from the perspective of the seller.

The PPI (using Iranian year to March 2017 as the base year) stood at 182.1 in Aban, indicating a 3.5% rise compared with the previous month.

The average PPI in the 12 months ending Nov. 21 grew by 26.9% compared with last year’s corresponding period. CBI put the preceding month’s annual PPI inflation at 22.4%.

The overall CPI stood at 153.6 in Aban, indicating a 3.5% increase compared with the previous month. The average CPI in the 12 months ending Nov. 21 increased by 18.4% compared with last year’s corresponding period.