Calm April in the Food Market

Results from the Central Bank and the Statistical Center of Iran regarding the average inflation rate in April of this year indicate that the trend of decreasing inflation rate, although slower than before and more cautious than ever, continues. According to the Central Bank report, the average inflation rate in the first month of this year was fixed at 15.5 percent, which is a decrease of one-tenth of a percent compared to the end of last year. The monthly inflation rate for April, according to the Central Bank's inflation index, was 1.3 percent, which is not very promising for the government's inflation control program. Additionally, the Central Bank's report indicates that the point-to-point inflation rate in the first month of the year reached 16.5 percent. The Statistical Center of Iran's report on urban inflation for April also shows that the trend of decreasing inflation rate continues in the first month of the year 94 (Persian calendar). According to this report, the average urban inflation rate in April was 14.5 percent, experiencing a decrease of 0.3 percent compared to the average inflation rate at the end of year 93. According to the Statistical Center of Iran, the point-to-point inflation in the month of Farvardin was 14 percent. However, perhaps the most noticeable changes in the price index of various goods and services for citizens are the changes in the price index of food and beverages, which express the public's perception of price changes more than other groups of goods and services. The main reason for this public sentiment can be found in the share of food and beverage costs in the household expenditure basket in Iran; according to the Statistical Center of Iran, from 2004 to 2013, the share of food and beverage costs from the average annual gross expenditure of an urban household was never less than 23 percent. In 2013, the share of food and beverage costs from the average annual gross expenditure of an urban Iranian household reached over 26 percent. The Central Bank's account of changes in the price index of food and beverages in April this year shows that the point-to-point inflation rate of this group in Farvardin 94 compared to the same month last year was less than 15 percent (14.9). The monthly inflation rate of the food and beverage price index in April this year was 2.6 percent, which is the highest growth among the price indices of various goods and services. These changes in the Statistical Center of Iran's report on inflation in the first month of this year indicate that the index for food, beverages, and tobacco increased by 2.4 percent compared to the end of year 93. In the reported month, the Statistical Center of Iran reported the point-to-point inflation rate for this group at 14 percent, and the average 12-month inflation for this group in April 94 was over 9 percent (9.2). An examination of the price changes of the selected goods basket by Radio Farda in April this year compared to the same month last year also shows that the average price of this basket of ten goods had a growth of less than half a percent (0.46) during this time period. The price changes of the items in the selected goods basket in April 94 compared to April of last year are presented in Table 1. During this time, the most significant price decrease was for tomatoes, which saw a price drop of over 60 percent, while the highest price increase was for potatoes, which rose by over 28 percent. A comparison of the price changes of these items in April this year compared to the previous month (Esfand of last year) is also presented in Table 2, showing that in these two time periods, the average price of the selected basket was slightly over half a percent (0.53). Among these items, the price of chicken meat experienced the most significant decrease from Esfand last year to Farvardin this year, with a drop of about 16 percent (15.68), while tomatoes recorded the highest price increase of over 18 percent (18.26). By changing the reference point for comparing the prices of the food items in the selected basket by Radio Farda to Farvardin two years ago (1392), the price differences of these ten items become more apparent. The average price change of this goods basket in Farvardin 94 compared to the same month two years ago shows an increase of 11.5 percent. Among the items in this goods basket, the highest price increase was for sugar, which experienced a growth of 35.5 percent in this comparison. Tomatoes also recorded a decrease of nearly 60 percent (58.6), marking the highest price drop in these two time periods. Overall, the changes in the price index of food and beverages in the reports from the Statistical Center of Iran and the Central Bank, along with the changes in the average prices of food items in the selected basket by Radio Farda, indicate that the prices of food and beverages have fluctuated at levels lower than the average inflation rate, which is good news for households that spend a large portion of their income on food and beverage expenses.