SCI Reports Iran's Inflation Rates for Income Deciles

EghtesadOnline: The Statistical Center of Iran has released inflation rates for each of the 10 deciles in which Iranian households are categorized on the basis of their income.

News ID: ۷۸۳۰۸۱

27 June 2018

The average goods and services Consumer Price Index in the 12-month period ending June 21, which marks the end of the Iranian month of Khordad, increased by 8.1% for the first decile (those with the lowest income) as it rose by 8.2% for the 10th decile (those with the highest income), compared with last year’s corresponding period.

According to SCI’s website, the inflation rate for the fourth to eighth deciles stood at 8.4% while it increased by 8.3% for second, third and ninth deciles.

The highest overall CPI (using the Iranian year to March 2017 as the base year) stood at 116.9 for the seventh and eighth deciles, and the lowest index was 115.8 for the first decile, according to Financial Tribune.

The year-on-year inflation rates increased by 8.9% for the first decile, 9.6% for second,9.9% for third, 10.1% for fourth, 10.2% for fifth, 10.3% for sixth, 10.6% for seventh, 10.7% for eighth, 10.8% for ninth and 11% for the 10th decile.

Income deciles are groupings that result from ranking either all households or total population in the ascending order based on income and then dividing the population into 10 groups, each constituting approximately 10% of the population.

The overall average goods and services Consumer Price Index in Iran in the 12-month period ending June 21 increased by 8.2% year-on-year.

The center had put the inflation rate for the preceding month that ended on May 21 at 8%.

The overall CPI stood at 116.2 in Khordad, indicating a record increase of 1.9% since the month ending April 20, 2013. The index registered a year-on-year increase of 10.2% compared with the similar month of last year.

SCI put urban and rural 12-month inflation for Khordad at 8.2% and 7.9% respectively. The overall CPI reached 116.1 for urban households and 117.1 for rural households, indicating an increase of 1.7% for urban areas and 2.7% for rural areas compared with the previous month.

The index registered a year-on-year increase of 10.2% for urban areas and 9.9% for rural areas compared with the similar month of last year.

PPI Marks Four-Year High

The Central Bank of Iran’s latest report shows Producer Price Index (using Iranian year to March 2012) stood at 271.2 for the month ending May 21, increasing by a four-year high of 1.8% compared with the previous month.

The PPI growth hit levels higher than 3% in the month ending May 21, 2014. Since then, it never increased beyond 1.7%, that makes its 1.8% growth alarming.

A year-on-year increase of 14.8% was registered in the PPI index compared with the similar month of last year, a rise not seen since Sept. 22, 2014.

The economic team of President Hassan Rouhani managed to gradually rein in the runaway inflation rates of above 40% inherited from the previous administration and bring it down to single digit territory for the first time after about a quarter century in June 2016.

The rate has been hovering around 10% ever since, but the increasing rate of PPI inflation is stoking concerns that CPI inflation may be on the rise again.

The increase in producer prices can be partly blamed on rial’s depreciation and its effect on the prices of intermediate goods.

Iran has been dealing with an increasing devaluation of its currency in recent months.

Producer Price Index gauges the price fluctuations of goods and services for the producer whereas Consumer Price Index measures changes in the price level of a basket of consumer goods and services purchased by households.

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.