The previous reading of SCI's YOY inflation was at 51.4% for the month.
The overall Consumer Price Index (using the Iranian year to March 2017 as the base year) stood at 173.5 in the period, indicating a 1.5% rise compared with the previous month.
The previous month-on-month CPI growth rate was 4%, according to Financial Tribune.
The average goods and services Consumer Price Index in the 12-month period ending May 21 increased by 34.2% compared with last year’s corresponding period.
SCI had put the average annual inflation rate for the preceding Iranian month, which ended on April 20, at 30.6%.
Rural vs. Urban Areas
Year-on-year and annual consumer price inflation measured for rural areas was higher than those in urban areas last month.
The CPI index registered a year-on-year increase of 50.7% for urban areas and 59.6% for rural areas compared with the similar month of last year.
The overall CPI reached 172 for urban households and 181.9 for rural households, indicating an increase of 1.6% for urban areas and 1% for rural areas compared with the previous month.
SCI put average 12-month inflation for urban and rural areas at 33.7% and 37.1% respectively.
Highest, Lowest Inflationary Groups
The highest monthly inflation among 12 goods and services groups during the month under review was recorded for the “transportation” group with a 7.8% increase.
“Foods and beverages” was the only consumer group with a 0.8% monthly deflation rate.
The “tobacco” group registered the highest and “education” posted the lowest year-on-year CPI increase of 119.6% and 21.3%, respectively.
The average annual inflation rate of the “tobacco” group was the highest in the 12-month leading to May 21 with 118.8% and that of “education” had the slowest annual inflation rate by registering an 18.9% rise.
Fiscal 2018-19 in Review
The goods and services Consumer Price Index in the 12-month period ending March 20, which marks the end of last fiscal year, increased by 26.9% compared with last year’s corresponding period.
SCI has put average 12-month inflation for urban and rural at 26.6% and 28.1% in the closing month of the last fiscal year (ended March 20, 2019).
The annual inflation rate of “tobacco” group was the highest in the same month with 102.4% and that of “housing, water, electricity, natural gas and other fuels” group had the slowest annual inflation rise of 16.8%.
IMF on Iranian Inflation
The International Monetary Fund has warned this year that inflation in Iran could reach 40%, as the country copes with the impact of tighter sanctions imposed by the United States.
Washington reimposed sanctions against Iran’s oil exports last November, demanding buyers of Iranian oil to stop purchases or face sanctions.
Iran’s economy shrank by 3.9% last year, according to IMF estimates, and is expected to shrink by 6% in 2019, Jihad Azour, director of IMF’s Middle East and Central Asia Department, told Reuters, adding that the projection preceded the latest elimination of waivers.
“Clearly the reimposition of sanctions and the removal of waivers will have an additional negative impact on the Iranian economy both in terms of growth and inflation, where inflation could reach 40% or even more this year,” he said.
The Iranian currency, rial, lost more than 60% last year, disrupting Iran’s foreign trade and boosting annual inflation.
The official Iranian rial rate is set at 42,000 rials to the US dollar, but its market rate hovers around 140,000 rials against the US dollar.
“Iran should work to eliminate the gap that currently exists between the market exchange rate and the official exchange rate,” said Azour.
“By aligning the market and official rates, this will help tame and control inflation and will reduce pressure on the exchange rate.”
The currency’s slide since last year has eroded the value of ordinary Iranians’ savings, triggering panic buying of dollars.