Iran's Consumer Inflation at 42.3% YOY

EghtesadOnline: The goods and services Consumer Price Index in Iran saw a year-on-year increase of 42.3% in the Iranian month of Bahman (Jan. 21-Feb. 19) compared with the similar month of last year, the Statistical Center of Iran reported.

News ID: ۷۴۶۷۴۹

23 February 2019

The overall CPI (using the Iranian year to March 2017 as the base year) stood at 158.1 in Bahman, indicating a 2.2% rise compared with the previous month.

The average CPI in the 12-month period ending Feb. 19 increased by 23.5% year-on-year.

SCI had put the average annual inflation rate for the preceding month of Dey, which ended on Jan. 20, at 20.6%, according to Financial Tribune.

The index registered a year-on-year increase of 41.5% for urban areas and 46.7% for rural areas compared with the similar month of last year.

SCI put average 12-month inflation for urban and rural areas at 23.4% and 24.2% respectively.

The overall CPI reached 157.3 for urban households and 162.9 for rural households, indicating an increase of 2.1% for urban areas and 2.8% for rural areas compared with the previous month.

Basket of Goods & Services

The highest month-on-month inflation among 12 groups of goods and services in Bahman was recorded for the “Food and Beverages” group with a 4.6% increase followed by “Transportation” with a 2.7% rise and “Clothing and Shoes” with a 2.6% increase compared with the preceding month.

The “Communications” group saw the slowest month-on-month inflation with a 0.1% rise in prices among these groups.

The “Tobacco” group registered the highest and “Education” group posted the lowest year-on-year CPI increase among the 12 groups of goods and services with 136.3% and 21.6%, respectively.

The average annual inflation rate of the “Tobacco” group was the highest in the 12 months leading to Feb. 19 with 93.3% and that of the “Housing, Water, Electricity, Natural Gas and Other Fuels” group had the slowest annual inflation rate with a 15.5% rise.

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.

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 price control, 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.

An increase of 52.9% was registered in PPI in the Iranian month of Dey (Dec. 22, 2018-Jan. 20) compared with the similar month of last year, the Central Bank of Iran's latest report shows.

PPI (using Iranian year to March 2017 as the base year for the first time) stood at 175.2 in Dey, indicating a 0.7% increase compared with the previous month.

The average PPI in the 12 months ending Jan. 20 grew by 34.2% compared with last year’s corresponding period. CBI put the preceding month’s annual PPI inflation at 30.6%.