Continued Price Increases in Iran; Families Have Spent More Than Last Year

The Statistical Center of Iran, in its latest report on inflation and price trends, announced that the consumer price index for households in Azar (December) of this year reached 217.0, marking a 2.9 percent increase compared to the previous month and a 44.4 percent increase over the past twelve months compared to the same period last year. According to this report, the point-to-point inflation for households in Azar was over 40 percent; meaning families, on average, spent 40.2 percent more than in Azar last year for a 'set of identical goods and services.' Consequently, the point-to-point inflation for Azar of this year has also increased by one percentage point compared to the previous month. The newspaper 'Etemad' reported on Thursday, analyzing the inflation situation in Iran and the new report from the Statistical Center, stating: 'This report shows that after five months of implementing the most severe recessionary policies in the monetary sector, referred to as stabilization policies, inflation has returned to above 40 percent and, on the other hand, monthly inflation has also broken its eight-month record.' According to Etemad, statistical evidence indicates that the reason for the increase in monthly and point-to-point inflation is the rise in the inflation of food, beverages, and tobacco items, as the monthly inflation of food exceeded 4 percent in Azar and, in fact, was higher than the overall inflation. Furthermore, the average inflation in this sector has surpassed 50 percent, with a significant portion of food inflation occurring in two groups: protein products and fruits and vegetables. Additionally, the Statistical Center reported that in Azar of this year, the average monthly inflation for households in the country was 2.9 percent, with this figure being 4.1 percent for the major group of 'food, beverages, and tobacco' and 2.3 percent for the major group of 'non-food goods and services.' In this report, hotels and restaurants, clothing and footwear, tobacco, recreation and culture, education, food and beverages, and miscellaneous goods and services have been positioned above the average point-to-point inflation, while the inflation of housing, water, electricity, gas, and other fuels in Azar has, contrary to Aban (November), fallen below the average index line. However, the inflation trend across income deciles is not uniform and was not the same for Azar either. For example, the monthly inflation for food in the first decile was 5.2 percent, while for the tenth decile, which is the wealthiest income group, this figure was 3.5 percent. According to the definitions of responsible institutions, a monthly inflation rate exceeding two percent signifies a crisis in commodity prices. The increase in the official inflation rate occurs while the Minister of Economy claims that the government's monetary policies in recent months, which have reduced liquidity, have led to a decline in the inflation rate. The government has used this rationale to prevent wage increases for workers and retirees, forecasting only an 18 percent increase in the salaries of employees and retirees in the draft budget for 1403 (2024). In this context, several media outlets have reported that this amount may be considered for increasing the minimum wage for workers subject to labor law. Reza Qureshi stated: 'People do not pay attention to government statistics because they perceive inflation from their own tables.' Issues of livelihood or occupational violations; the prevalence of hourly rental homes. Access to treatment is becoming more expensive; a proposal for a 45 percent increase in medical tariffs by the Ministry of Health. The lagging wages behind the inflation rate over 43 years; the purchasing power of workers has decreased by 65 percent. A warning about inflation in the proposed budget bill for 1403; inflation will exceed 50 percent. A labor representative stated: 'The wages of labor in Iran, with some leniency, are second to last after Venezuela.'