Q1 Producer Inflation at 23.6%

EghtesadOnline: The Producer Price Index in the four-quarter period ending June 20, which marks the end of the first quarter of the current Iranian year, grew by 23.6% compared with the corresponding period of last year.

News ID: ۷۵۰۹۷۷

13 September 2020

The index calculated for the period leading to March 19, 2020, marking the end of Q4 of last fiscal year, had increased by 36.7%.

The lowest and highest average annual producer inflations were registered for electricity and mining sectors with 9.9% and 37.7%, respectively.

PPI (using 2011 as the base year) stood at 528.2 in Q1 (March 20-June 20), indicating an 11.4% increase compared with the previous quarter and a 12% growth over the same quarter of last year, the Statistical Center of Iran reported.

The lowest quarter-on-quarter producer inflation was registered for services with 6.7% and the highest was posted by agronomy and horticulture with 76.6%.

When compared with the same quarter of last year, agriculture posted the lowest PPI of 3.6% and electricity registered the highest PPI of 40.6% in the first quarter of the current year.

Producer inflation stood at 474.2 in Q4 (Dec. 22, 2019-March 19) of last Iranian year, indicating a 0.3% decrease quarter-on-quarter and a 15% growth year-on-year.

PPI represents the average movement in selling prices from domestic production over time and 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 change in the cost of production.

Industries

The PPI of industrial sector in the four-quarter period ending June 20 grew by 23.8% compared with the same period of the previous year.

The sector’s PPI for the four-quarter period to March 19, 2020, which marked the end of Q4 of last Iranian year, had increased by 41.8%.

The overall PPI of industrial sector stood at 587.7 in Q1, indicating an 8.1% increase compared with the previous quarter and a 7.8% growth over same quarter of the year before.

The sector’s quarterly and year-on-year PPI for the quarter to March 19 had increased by 1.8% and 13.3%, respectively.

The lowest quarterly PPI inflation rates in this sector were recorded for the “coal production industries-oil refineries” subsector with -1.8% and “chemical industries” with 2.8% in Q1.

The highest quarterly PPI inflation rates were posted for “manufacturing of office machinery” with 38%, “manufacturing of transportation vehicles” with 34% and “production of paper and related products” with 23%.

The lowest year-on-year PPI inflation rate was registered for the “coal production industries-oil refineries” subsector with -21.8% and the highest increase was posted by “manufacturing of office machinery” with 89.7% compared with the same quarter of the year before.

The lowest annual PPI inflation was recorded by “coal production industries-oil refineries” with 4.2% and the highest increase was reported for “manufacturing of office machinery” with 112.1%, “print and publication of recorded media” with 69.2% and “production of motor vehicles, trailers and semi-trailers” with 62.4%.

Services

The average PPI for the services sector in the four-quarter period ending June 20 increased by 27.6% compared with the same period of last year.

The sector’s average PPI for the four-quarter period to March 19 had increased by 29% year-on-year.

The overall PPI for the services sector (using 2011 as the base year) stood at 440.3 in the first quarter of the current fiscal year (March 20-June 20), indicating a 6.7% increase compared with the preceding quarter and a 26.6% rise compared with last year's same quarter.

Services PPI is calculated based on the indexes of eight subsectors, namely “repairing motor vehicles, motorcycles and home devices” with a coefficient of 2.5%, “hotels and restaurants” with a coefficient of 4.8%, “transportation, warehouse services and communications” with a coefficient of 29.6%, “brokerage (insurance) services” with a coefficient of 1.9%, “real estate, renting and business” with a coefficient of 39%, “education” with a coefficient of 12.3%, “health services and social work” with a coefficient of 5.8% and “other public, social and personal services” with a coefficient of 4.1%.

PPI for “repairing motor vehicles, motorcycles and home devices” stood at 584.5, indicating a 10.1% rise compared with the previous quarter and a 35.6% growth compared with the same quarter of last year.

The index for “hotels and restaurants” stood at 706.8, posting a 7.7% rise quarter-on-quarter and a 31.1% rise year-on-year.

For “transportation, warehousing services and communications”, PPI stood at 584.2, registering an 8.6% increase QOQ and a 34% increase YOY.

For “financial brokerage (insurance)”, it was at 437.1, indicating a 14.5% rise compared with the previous quarter and a 19.1% increase compared with the same quarter of last year.

“Real estate, renting and business” saw PPI stand at 283.6, registering a 5% rise QOQ and a 15.7% increase YOY.

For “education”, the index was at 337.6, posting a 1.8% rise compared with the previous quarter and a 21.8% increase compared with the same quarter of the year before.

“Health services and social work” had a PPI of 607.7, indicating a 7% rise over the preceding quarter and a 31.1% increase over the same quarter of last year.

PPI measured for the subsector of “other public, social and personal services” stood at 448.5, showing a 5.2% growth compared with the previous quarter and a 26.4% increase over the same quarter of the year before.

Mining

The average PPI for the mining sector in the four-quarter period ending June 20 increased by 37.7% compared with the same period of last year.

The sector’s average PPI for the four-quarter period to March 19 had increased by 45.1% year-on-year.

The average annual producer inflation of the “iron ore extraction” subsector in Q1 was at 72.2% and those of “extraction of metal ores” and “extraction of other mines” subsectors were at 36% and 34.3%, respectively.

The overall PPI of the mining sector (using 2011 as the base year) stood at 628.2 in Q1, indicating a 16.1% increase compared with the previous quarter and a 32.4% growth over the same quarter of last year.

The quarter-on-quarter producer inflation of “iron ore extraction” subsector was at 2.8% in spring and those of the “extraction of metal ores” and “extraction of other mines” subsectors were at 17.2% and 17%, respectively.

The year-on-year producer inflation of the “iron ore extraction” subsector was 22.3% and those of the “extraction of metal ores” and “extraction of other mines” subsectors were 33.2% and 32.9%, respectively.

Electricity

PPI for the electricity sector in the four-quarter period ending June 20 increased by 9.91% compared with the same period of last year.

The PPI of the sector (using 2011 as the base year) stood at 154.82 in Q1, indicating a growth of 40.56% compared with the same quarter of last year.

Industrial Livestock Farms

PPI for industrial-scale livestock farms (using 2011 as the base year) stood at 509.96 in Q1, indicating a 1.96% and 1.5% increase compared with the preceding quarter and the same quarter of last year, respectively.

Over the four-quarter period ending June 20, livestock farms’ PPI increased by 17.77% year-on-year.

PPI for industrial-scale livestock farms increased by 36.16% in the four-quarter period ending March 19.

Golestan posted the sharpest producer deflation with 5.34% compared with the preceding quarter while Yazd posted the highest quarter-on-quarter producer inflation with 13.5%.

Markazi Province posted the sharpest year-on-year producer deflation of 13.31% while Yazd registered the highest year-on-year producer inflation at 23.28% in Q1.

Agronomy, Horticulture, Traditional Husbandry

PPI for the “agronomy, horticulture and traditional husbandry” group in the four-quarter period to June 20 increased by 14.2% compared with the year before.

The PPI of this group (using 2011 as the base year) stood at 571.7 in Q1 (March 20-June 20), indicating a 3.3% increase compared with the same quarter of the year before.

Chicken Farms

The average PPI for industrial chicken farms in the first quarter of the current Iranian year (March 20-June 20) increased by 16.12% compared with the corresponding quarter of last year.

The overall PPI for the sector in spring, which ended on June 20, using 2011 as the base year, stood at 504.81, indicating a 1.24% growth compared with the preceding quarter.

During the four-quarter period ending June 20, PPI increased by 12.85% compared with the similar period of the year before. The index grew by 19.36% in the four-quarter period ending March 19.

The highest quarter-on-quarter increase of the index among Iranian provinces during the period under review was registered for Gilan with 29.14% and the sharpest producer deflation was recorded in Bushehr with 23.34%.

On a year-on-year basis, Chaharmahal-Bakhtiari Province registered the highest increase with 128.06% and Bushehr posted the biggest deflation with 19.27%.