Decrease in Food Inflation in August of This Year

The food inflation rate in August of this year decreased by 2.7% compared to the previous month, according to the Central Bank's report on the price index of goods and services consumed in urban areas of Iran. The price index of food and beverages in August 2015 saw a 12% increase compared to the same month last year, referred to as the point-to-point inflation rate. According to the Central Bank's report, the average inflation rate in August of this year was 15.4%, indicating that the increase in food inflation during the reported month was less than the average inflation rate. However, considering the significant weight of food and beverages in calculating the inflation rate, which has the highest importance after housing, water, electricity, gas, and other fuels, any change in the price index of this group will affect the living standards and welfare of households. Based on last month's report from the Central Bank regarding the price index of goods and services in urban areas, the point-to-point inflation rate for the main food and beverage group in July of this year was 16%. An examination of the monthly price changes of a selected basket by Radio Farda also shows signs of slight decreases or increases. The prices of 10 selected items in Radio Farda's basket in August of this year, compared to July 2015, experienced an average increase of about 4% (3.88%). The highest price increase during this two-month period was for tomatoes, which rose by 40.3% from July to August of this year. The largest price decrease was for domestic rice, which saw a decline of more than 5% (5.08%). Details of the price changes for this basket of goods can be seen in Table 1. When we change the basis for comparing the price changes of these 10 items to August of last year, the results do not differ significantly. Comparing the average price changes of these 10 items in these two time periods shows that from August last year to August 2015, the average price of this basket increased by more than 1% (1.21%). In these two time periods, the highest price increase was for tomatoes, which saw an increase of about 47%. The price of potatoes experienced a decrease of more than 27% (27.28%) during this one-year period, marking a record price drop. Details of price changes for other items in Radio Farda's selected basket from August last year to August this year can be seen in Table 2. In the final stage of comparing the price changes of this basket, we have changed the basis of comparison to August 2013, which marks the beginning of Hassan Rouhani's presidency. With this change in the basis of comparison, we find that the average price of this basket in August 2015 compared to the same month two years ago experienced an increase of more than 3% (3.73%). The average inflation rate during this period was much higher, leading to the conclusion that the rate of price increase for this basket was on average slower than the inflation rate. In these two time periods, the highest price increase was for onions, which ended this period with an increase of more than 18%, while the largest price decrease was for potatoes, which recorded a price drop of more than 27%. Details of price changes for other products in Radio Farda's selected basket during these two time periods can be found in Table 3. In this context, inflation in July reached 14.1% for urban households, the monthly inflation rate turned negative after six years, and there was a decrease in prices and transactions in the housing and construction sector. The inflation rate in August in Iran shows a decrease.