Q1 Producer Inflation at 60.4%

EghtesadOnline: The producer price index in the four-quarter period ending June 21, which marks the end of the first quarter of the current Iranian year, grew by 60.4% compared with the corresponding period of last year.

News ID: ۷۸۶۹۹۹

11 September 2021

The index calculated for the four-quarter period leading to March 20, marking the end of Q4 of last year, had increased by 46.7%.

The lowest and highest annualized producer inflation was registered for services and mining sectors with 42% and 112.3%, respectively.

PPI (using fiscal 2016-17 as the base year) stood at 419.4 in Q1 (March 21-June 21), indicating a 10.1% increase compared with the previous quarter and a 73% growth over the same quarter of last year, the Statistical Center of Iran reported.

The lowest and highest quarter-on-quarter producer inflation was registered for production, transmission and distribution of electricity with 1.3% and mining with 38.7%, respectively.

Compared with the same quarter of last year, production, transmission and distribution of electricity posted the lowest PPI of 32.1% and mining registered the highest PPI of 154.1% in the first quarter of the current year.

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

Services

The overall PPI for the services sector stood at 322.8 in Q1, indicating a 11.2% increase compared with the preceding quarter.

The index measured for Q1 producer inflation in the services sector indicates a 48.7% increase compared with the same quarter of the year before, which is the highest year-on-year inflation since the spring of 2012 (the earliest available data on services producers' inflation on SCI’s website).

The average PPI for the services sector in the four-quarter period ending June 21 increased by 42% compared with the same period of the year before, which is the highest annual inflation since winter 2013 (the earliest available data on services producers' inflation on SCI’s website).

Services PPI is calculated based on the indexes of 13 subsectors, namely “water networks, wastewater management, and wastewater treatment” with a coefficient of 1.2%, “repairing motor vehicles and motorcycles” with  2.8%, “transportation and warehouse services” with  23.2%, “services regarding accommodation and food” with  4.8%, “information and communications” with  8.5%, “insurance services” with  1.7%, “real-estate services” with  26.8%, “professional, scientific and technical activities” with  3%, “administrative and support services” with  1.7%, “education” with  9.3%, “social work services” with  14.2%, “art, entertainment and leisure” with  1.1%, and “services categorized as “others” with 1.8%.

For “water networks, wastewater management and wastewater treatment”, PPI stood at 199 in Q1, indicating an increase of 20% and 22% compared with the previous quarter and the same quarter of the year before. The average annual PPI for the subsector in the four-quarter period ending June 21 increased by 6.3%.

PPI for “repairing motor vehicles and motorcycles” stood at 507.1, indicating a 14% rise compared with the previous quarter and a 70.3% growth compared with the same quarter of the year before. The average PPI for the subsector in the four-quarter period ending June 21 increased by 61.6%.

The index for “transportation and warehouse services” stood at 380.6, posting a 14.2% rise quarter-on-quarter and a 60.5% rise year-on-year. The average annual PPI for the subsector in the four-quarter period increased by 54.5%.

For “services regarding accommodation and food”, PPI stood at 622.3, registering a 17.2% increase QOQ and an 84.5% increase YOY. The average annual PPI for the subsector in the four-quarter period increased by 65.9%.

For “information and communications”, it stood at 232.3, indicating a 6.4% rise compared with the previous quarter and a 25.6% 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%.

“Insurance services” saw the PPI stand at 209.5, registering a 25.8% rise QOQ and a 31.6% increase YOY. The average annual PPI for the subsector in the four-quarter period increased by 21.9%.

For “real-estate services”, the index was at 201.7, posting a 3.8% rise compared with the previous quarter and a 25.7% increase compared with the same quarter of the year before. The average annual PPI for the subsector in the four-quarter period increased by 24.3%.

“Professional, scientific and technical activities” had a PPI of 276, indicating a 10.3% rise over the preceding quarter and a 45.2% increase over the same quarter of the year before. The average annual PPI for the subsector in the four-quarter period increased by 41.5%.

The PPI measured for the subsector of “administrative and support services” stood at 558.6, showing an 11.6% growth compared with the previous quarter and a 77.1% increase over the same quarter of the year before. The average annual PPI for the subsector in the four-quarter period increased by 62.9%.

“Education” recorded a PPI of 265.2, indicating a 1.9% rise over the preceding quarter and a 30.1% increase over the same quarter of the year before. The average annual PPI for the subsector in the four-quarter period increased by 30%.

For “social work services”, PPI stood at 402.5, indicating a 15.4% rise compared with the previous quarter and a 55.7% increase compared with the same quarter of the year before. The average annual PPI for the subsector in the four-quarter period increased by 46.2%.

“Art, entertainment and leisure” had a PPI of 331.4, indicating a 10.5% rise over the preceding quarter and a 42.8% increase over the same quarter of the year before. The average annual PPI for the subsector in the four-quarter period increased by 39.2%.

And, “services categorized as others” registered a PPI of 424.9, indicating a 13% rise over the preceding quarter and a 54.8% increase over the same quarter of the year before. The average annual PPI for the subsector in the four-quarter period increased by 48.3%.

Industry

The overall PPI of the industrial sector stood at 525.6 in Q1, indicating an 8.2% increase compared with the previous quarter and a 94.7% growth over the same quarter of the year before.

The sector’s quarterly and year-on-year PPI for the quarter to March 20, which marked the end of Q4 of the last Iranian year, had increased by 12.2% and 93.6%, respectively.

The industrial PPI in the four-quarter period ending June 21 grew by 78.5% compared with the same period of the year before. The sector’s PPI for the four-quarter period to March 20 had increased by 56.8%.

The lowest quarterly PPI inflation rates in Q1 were recorded for “production of coke and petroleum refinery byproducts” with 0.8% and “manufacturing of motor vehicles, trailers and semi-trailers” with 2.6%. The highest quarterly PPI inflation rates were posted for “print and publication of recorded media” with 25.3%, “production of beverages” with 23.1%, “manufacturing of clothing” with 21.7% and “manufacturing of other industrial products” with 17.7%.

The lowest year-on-year PPI inflation rate was registered for “production of tobacco” with 20%, “production of pharmaceuticals, chemicals used in pharmacy and herbal remedies” with 43% and “manufacturing of other industrial products” with 50.3%.

The highest year-on-year increases were posted by “manufacturing of chemicals” with 135.7%, “production of base metals” with 112% and “production of coke and petroleum refinery byproducts” with 102.9% compared with the same quarter of last year.

The lowest annual PPI inflation was recorded by “production of tobacco” with 20.2%, “manufacturing of other industrial products” with 36.1% and “production of pharmaceuticals, chemicals used in pharmacy and herbal remedies” with 36.7%. The highest annual PPI was reported for “manufacturing of other transportation equipment” with 134.7% and “production of chemicals” with 104.8%.

Mining

The average Producer Price Index for the mining sector in the four-quarter period ending June 21 increased by 112.3% compared with the same period of the year before.

The sector’s average PPI for the four-quarter period to March 20, i.e., the end of Q4 of the last Iranian year, had increased by 79.8% year-on-year.

The average annual producer inflation of the “coal extraction” subsector in Q1 was at 99.4% and that of “extraction of metal ores” and “extraction of other mines” subsectors were at 120.1% and 61.7%, respectively.

The overall PPI of the mining sector (using the Iranian year ending March 2017 as the new base year) stood at 925.2 in Q1, indicating a 38.7% increase compared with the previous quarter and a 154.1% growth over the same quarter of last year.

The quarter-on-quarter producer inflation of the “coal extraction” subsector was at 32.7% in Q1 and those of the “extraction of metal ores” and “extraction of other mines” subsectors were at 40.4% and 24.4%, respectively.

The year-on-year producer inflation of the “coal extraction” subsector was 126.5% and those of the “extraction of metal ores” and “extraction of other mines” subsectors were 166.2% and 77.1%, respectively.

Electricity

The PPI for the electricity sector during the four-quarter period ending June 21 increased by 45% compared with the same period of the year before.

The PPI of the sector stood at 173.8 in Q1, indicating an increase of 1.2% compared with the preceding quarter and a growth of 32% compared with the same quarter of the year before.

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.

Agronomy, Horticulture, Traditional Husbandry

The PPI for the “agronomy, horticulture and traditional husbandry” group in the four-quarter period to June 21 increased by 47.2% compared with the year before. The Statistical Center of Iran had put producer inflation of the four-quarter period leading to March 20 (the previous quarter) at 34.7%.

The overall PPI of this group (using the year ending March 2017 as the new base year) stood at 438.2 in Q1 (March 21-June 21), indicating a 68.4% increase compared with the same quarter of the year before. Year-on-year producer inflation of the previous quarter had increased by 52.9%.

Industrial Chicken Farms

The average PPI for industrial chicken farms in Q1 increased by 107.35% compared with the corresponding quarter of last year.

The overall PPI for the sector in Q1, which ended on June 21, stood at 417.34, indicating a 7.3% growth compared with the preceding quarter.

During the four-quarter period ending June 21, PPI increased by 79.79% compared with the similar period of the year before. The index had increased by 58.1% in the four-quarter period ending March 20.

The highest quarter-on-quarter increase of the index among Iranian provinces during the period under review was registered for Khorasan Razavi with 19.5% and the lowest was posted for Yazd with 1.8%.

Tehran posted the highest quarter-on-quarter deflation among Iranian provinces with 6.5%.

On a year-on-year basis, Khuzestan registered the highest increase with 187.6% and Tehran posted the lowest inflation with 64.1%.

Industrial Livestock Farms

The PPI for industrial-scale livestock farms stood at 405.97 in Q1, indicating a 6.8% and 76% increase compared with the preceding quarter and the same quarter of the year before, respectively.

Over the four-quarter period ending June 21, livestock farms’ PPI increased by 51.83% year-on-year, the Statistical Center of Iran reported.

PPI for industrial-scale livestock farms had increased by 32.42% in the four-quarter period ending March 20.

Kurdestan posted the highest quarter-on-quarter producer inflation with 16.2% while Khorasan Razavi posted the lowest producer inflation with 2% compared with the preceding quarter.

Alborz registered the highest year-on-year producer inflation with 101.2% while Sistan-Baluchestan posted the lowest year-on-year producer inflation of 23.3% in Q1