Q2 PPI Inflation at 23.6%

EghtesadOnline: The producer price index in the four-quarter period ending Sept. 21, which marks the end of the second quarter of the current Iranian year, grew by 23.6% compared with the corresponding period of last year.

News ID: ۷۵۱۶۰۱

29 November 2020

The index calculated for the period ending June 20, marking the end of Q1 of the current year, had also increased by 23.6%.

The lowest and highest average annual producer inflation rates of 10.9% and 44% were registered for agriculture and mining sectors respectively.

PPI (using 2011 as the base year) stood at 671.7 in Q2 (June 21-Sept. 21), indicating a 27.2% increase compared with the previous quarter and a 40.7% growth over the same quarter of last year, the Statistical Center of Iran reported.

The lowest quarter-on-quarter producer inflation was registered for agronomy and horticulture with 11.8% and the highest was posted by industries with 37%.

When compared with the same quarter of last year, agriculture posted the lowest PPI of 21.9% and mining registered the highest PPI of 69.1% in the second quarter.

The producer inflation stood at 528.1 in Q1 (March 20-June 20), indicating an 11.4% increase quarter-on-quarter and a 12% 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 changes in the cost of production.

Industrial Sector

The overall Producer Price Index of the industrial sector stood at 805.4 in Q2, indicating a 37% increase compared with the previous quarter – the highest quarter-on-quarter rise since the fiscal 2013-14, when the earliest available data on producers' inflation became available in Iran.

The year-on-year PPI inflation in summer this year was at 47.4%.

The sector’s quarterly and year-on-year PPI for the first quarter to June 20 had increased by 8.1% and 7.8%, respectively.

The lowest quarterly PPI inflation rates were recorded for “production of tobacco and cigarettes” subsector with 0% and “print and publication of recorded media” with 7.1% in Q2.

The highest quarterly PPI inflation rates were posted for “coal production industries-oil refineries” with 57%, “manufacturing of office machinery” with 43.6% and “production of base metals” with 43.5%.

The lowest year-on-year PPI inflation rate was registered for “production of tobacco and cigarettes” subsector with 15% and the highest increase was posted by “manufacturing of office machinery” with 172.4%, “production of base metals” with 108.4%, “manufacturing of transportation vehicles” with 94.7%, “production of electricity generators and transformers” with 81.6%, “production of furniture” with 75.4%  and production of “metal products, excluding machinery” with 72.3% compared with the same quarter of last year.

The industrial PPI in the four-quarter period ending Sept. 21 grew by 24% compared with the same period of last year. The sector’s PPI for the four-quarter period to June 20 had increased by 23.8%.

The lowest average annual PPI inflation was recorded by “coal production industries-oil refineries” with -0.2% and the highest increase was reported for “manufacturing of office machinery” with 130.1%, “manufacturing of transportation vehicles” with 59.7% and “production of base metals” with 56.5%.

Services

The producer price inflation in the services sector also reached record highs.

The overall PPI for the services sector (using 2011 as the base year) stood at 500.9 in Q2, indicating a 13.8% increase compared with the preceding quarter–the highest quarter-on-quarter rise since summer 2011, according to the earliest available data on services producers' inflation published on the Statistical Center of Iran website.

The index saw a 34.2% increase compared with last year’s same quarter, which is the highest year-on-year inflation since spring 2012.

The average PPI for the services sector in the four-quarter period ending Sept. 21 increased by 28.7% compared with the same period of last year. The sector’s average PPI for the four-quarter period to June 20, end of Q1 of the current Iranian year, had increased by 27.6% year-on-year.

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%, “financial brokerage (insurance)” 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 appliances” stood at 674, indicating a 15.3% rise compared with the previous quarter and a 44.4% growth compared with the same quarter of last year. The average PPI for the subsector in the four-quarter period ending Sept. 21 increased by 36.7%.

The index for “hotels and restaurants” stood at 808.3, posting a 14.4% rise quarter-on-quarter and a 37.8% rise year-on-year. The average annual PPI for the subsector in the four-quarter period increased by 37.9%.

For “transportation, warehousing services and communications”, PPI stood at 693.7, registering an 18.7% increase QOQ and a 44.8% increase YOY. The average annual PPI for the subsector in the four-quarter period increased by 37.7%.

For “financial brokerage (insurance)”, it was at 476, indicating an 8.9% rise compared with the previous quarter and a 28.7% increase compared with the same quarter of last year. The average annual PPI for the subsector in the four-quarter period increased by 24.1%.

PPI for “real estate, renting and business” stood at 310.1, registering a 9.3% rise QOQ and a 20.2% increase YOY. The average annual PPI for the subsector in the four-quarter period increased by 16.5%.

For “education”, the index was at 399.2, posting a 5.7% rise compared with the previous quarter and a 26.9% increase compared with the same quarter of the year before. The average annual PPI for the subsector in the four-quarter period increased by 22.3%.

“Health services and social work” had a PPI of 701.6, indicating a 15.5% rise over the preceding quarter and a 36.9% increase over the same quarter of last year. The average annual PPI for the subsector in the four-quarter period increased by 29.7%.

PPI measured for the subsector of “other public, social and personal services” stood at 495.2, showing a 10.4% growth compared with the previous 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 27.1%.

Mining

The average Producer Price Index for the mining sector in the four-quarter period ending Sept. 21 increased by 44% compared with the same period of last year.

The sector’s average PPI for the four-quarter period to June 20, end of Q1 of the current Iranian year, had increased by 37.7% year-on-year.

The average annual producer inflation of the “coal extraction” subsector in Q2 was at 72.8% and those of “extraction of metal ores” and “extraction of other mines” subsectors were at 43.8% and 35.4%, respectively.

The overall PPI of the mining sector (using 2011 as the base year) stood at 831.2 in Q2, indicating a 32.3% increase compared with the previous quarter and a 69.1% growth over the same quarter of last year, which is a record high.

The quarter-on-quarter producer inflation of the “coal extraction” subsector was at 48.5% in Q2 and those of the “extraction of metal ores” and “extraction of other mines” subsectors were at 35.4% and 12.5%, respectively.

The year-on-year producer inflation of the “coal extraction” subsector was 84% and those of the “extraction of metal ores” and “extraction of other mines” subsectors were 74.4% and 41.4%, respectively.

Agriculture

PPI for the “agriculture” group in the four-quarter period to Sept. 21 increased by 10.9% compared with the year before.

SCI had put producer inflation of the four-quarter period leading to June 20 (the previous quarter) at 14.9%.

The overall PPI of this group (using 2011 as the base year) stood at 629.2 in Q2 (June 21-Sept. 21), indicating a 12.2% increase compared with the preceding quarter and a 21.9% growth compared with the same quarter of the year before.

The “fruits and nuts” subsector recorded quarterly deflation of 0.3% in Q2 whereas the highest quarterly PPI inflation in the agriculture group was posted for “classified raw materials” with 39.9%

“Traditional rearing of sheep and lamb” registered a year-on-year PPI deflation rate of 11.5% while “classified raw materials” recorded the highest producer inflation of 55.5% compared with the same quarter of last year.

Electricity

The Producer Price Index of electricity sector (using 2011 as the base year) stood at 193.58 in Q2, indicating a growth of 44.11% compared with the same quarter of last year. It is the highest year-on-year rise since the spring of 2013, the earliest available data on services producers' inflation on the Statistical Center of Iran’s website.

The producer inflation for the electricity sector during the four-quarter period ending Sept. 21, increased by 22.7% compared with the same period of last year.