Continued Decline in Inflation Rate to 18.2%; Wedding Chicken and Mourning Tomatoes

The reduction in the inflation rate has been so frequently reported in recent months that if the Central Bank or the Statistical Center of Iran mentions the continuation of this trend in their monthly reports, it does not come as a surprise to media or economic experts. According to the Central Bank's announcement, the inflation index for the twelve months ending in November this year has reached 18.2%, maintaining its downward trend, which shows a decrease of 1.2 percentage points compared to the inflation index for the year ending in October. However, the point-to-point inflation has a different narrative; the point-to-point inflation rate in October, which reached 14.6%, could not maintain its downward trend in November and increased by half a percentage point to 15.1%. The report from the Statistical Center of Iran regarding the inflation rate for November also indicates the maintenance of the downward trend in the average annual inflation rate ending in November. This rate was reported as 17.8% for urban households, showing a decrease of 1.3 percentage points compared to the similar rate in October. The Statistical Center is more optimistic; according to its report, the point-to-point inflation rate for urban households in November 93 has reached 13.2%, which indicates that contrary to the Central Bank's assessment, based on the Statistical Center's calculations, the point-to-point inflation rate has maintained its downward trend in these two consecutive months, decreasing by 1% from October to November this year. However, what is significant in the Central Bank's report regarding the changes in the inflation index in November, which likely raises concerns among economists and analysts, is the trend of monthly inflation rate increases, which has consistently been above 1% in recent months. The inflation rate in November this year, as reported by the Central Bank, has increased by 1.5% compared to the previous month. This level of increase has also been experienced in previous months, which is not a good sign for controlling the acceleration of inflation in the coming months and indicates the difficult task the government faces in maintaining the continued decline in the inflation rate. Analyzing the details of the changes in the inflation index in both the Central Bank and the Statistical Center reports shows that in recent months, the growth of the price index for food and beverages has been lower than the average inflation rate, and this index is increasing at a slower pace than other commodity and service groups. The price index for the food and beverage group in the Central Bank's report for November shows that the point-to-point inflation for this group compared to November last year was 9.2%. The price index for this commodity group in November at the Statistical Center of Iran, which includes food, beverages, and tobacco, was reported as 7.3% compared to the same month last year (point-to-point inflation), while the point-to-point inflation rate for non-food goods and services in the same month was 16%. The 12-month inflation rate for food, beverages, and tobacco in November, according to the Statistical Center of Iran, was also reported as 15.5%. The highest increase in the price index among the main groups in the Central Bank's report pertains to the health and medical group, which, like in previous months, has recorded the highest inflation among commodity and service groups, with a point-to-point inflation rate of 30.3% in November. The price index for the recreation and cultural affairs and transportation groups follows. According to the Statistical Center's report on the inflation rate in November this year for Iranian urban households, the record for point-to-point inflation among commodity groups belongs to water, electricity, and fuel, which has seen a price increase of 27.1%, followed by transportation, education, and recreation groups. An analysis of the price changes in the selected commodity basket by Radio Farda, which includes 10 commonly consumed food items in Iranian households, also shows that the prices of items in this basket in November this year have increased by an average of about 10% (9.1%) compared to the same month last year. The highest price increase from November last year compared to November this year pertains to tomatoes, which have experienced a price increase of over 71% (71.2%) during these two time periods. According to this statistical analysis, chicken meat in November this year has seen a decrease of approximately 17% (16.9%) compared to its price in November last year. Details of the price changes for the 10 food items included in this basket in two time periods of November this year compared to November last year can be seen in Table 1. An analysis of the price changes in the selected commodity basket by Radio Farda in the two time periods of October and November this year also indicates an average price increase of over 12% (12.5%), which is considered a significant increase. Comparing this figure with the increase in previous months, as reported in Radio Farda's periodic monthly reports on this commodity basket, shows that inflation in the price of this commodity basket has significantly increased. The highest price increase among these items and the 10 commodities occurred in the two consecutive months of October and November, with tomatoes experiencing a price increase of more than double (119% increase) from October to November this year. Chicken meat also recorded a decrease of over 13% (13.25%) during these two consecutive months, making it the cheapest item among the 10 food items included in Radio Farda's selected commodity basket during this time. Details regarding the price changes of this commodity basket in the two-month period from October to November 93 can be seen in Table 2. According to the statistics and figures in the reports from the Statistical Center of Iran and the Central Bank regarding the inflation index, the government has undeniably succeeded in controlling the acceleration of inflation; however, this does not mean the end of the road. There is still a long way to go to bring the inflation rate down to the usual average global inflation figures, which currently range between 3% and 4%. Moreover, moving beyond the surface inflation rate and reaching the core of controlling inflation makes the government's task more challenging, especially as the continued growth of liquidity and other political factors affecting the inflation rate, including the movement of capital into speculative markets for profit and to reduce future political risk, could pose challenges to the government's success in controlling inflation acceleration, while examining monthly inflation rates doubles this concern and possibility.