Food Inflation 'Lower than Average Inflation Rate'

According to a report published by the Statistical Center of Iran on inflation rates at the end of the year 1393 (March 2015), the eleventh government has fulfilled its promise of achieving an inflation rate of less than 15 percent, although the Central Bank's account of the inflation rate at the end of 1393 does not confirm this. The Statistical Center of Iran reported that the inflation rate in Esfand (the last month of the Iranian year) reached 14.8 percent, which is a 0.4 percent decrease compared to the inflation rate for the 12 months ending in Bahman of the previous year. The point-to-point inflation rate for Esfand 1393 was reported at 14.4 percent, showing a slight decrease of 0.2 percent compared to the previous month. However, the Central Bank's report indicated an inflation rate of over 15 percent (15.6 percent) at the end of 1393, meaning the promise to reach a 15 percent inflation rate by the end of the year was not fulfilled. The point-to-point inflation rate in the Central Bank's report for Esfand was slightly over 16 percent (16.2 percent). According to the Statistical Center's report, the monthly change in the food and beverage index in Esfand compared to the previous month showed a slight increase of less than one percent (0.6 percent). The index for this group in Esfand compared to Esfand of the previous year (Esfand 1392) recorded an increase of less than 10 percent (9.5 percent). The growth rate of this group's index in the 12 months ending in Esfand 1393 compared to the same period of the previous year was less than 10 percent (9.8 percent); all these figures indicate that the growth of the food and beverage index was lower than the average inflation and the general price level growth. In the Central Bank's report on the inflation rate at the end of the previous year, the food and beverage index in the last month of the year compared to Esfand 1392 had a growth of 13.1 percent, which was lower than the average inflation rate at the end of the year (15.6 percent). The food and beverage index in Esfand compared to the previous month (Bahman) also experienced a growth of less than two percent (1.6 percent). The trend of changes in the food and beverage index in Esfand differs from the Central Bank's narrative of the general price level at the end of the previous year. An analysis of the price index of a selected basket of goods by Radio Farda in Esfand showed similar results to the Statistical Center's report, with a simple average price of this basket in Esfand compared to the same month of the previous year (Esfand 1392) showing a decline of 6.7 percent, indicating an average price decrease at this time. The largest price decrease was related to tomatoes, whose price in Esfand 1393 compared to the same month of the previous year decreased by over 43 percent. However, the highest price increase in Esfand compared to Esfand 1392 was for chicken meat, which saw a price increase of about 16 percent. Table 1 shows the details of price changes in the selected basket of goods by Radio Farda in Esfand 1393 and the same month of the previous year. Changing the basis for price comparison from Esfand last year to Bahman 1393 also indicates a decrease in the weighted average price of this basket, although overall, the average price changes of this basket from Bahman 1393 to Esfand showed a decrease of about 3 percent (2.99 percent). Among the 10 items in this basket, the highest price increase in this one-month period was for chicken meat, which increased by nearly 8 percent. Tomatoes experienced the most significant price decrease among the items in the selected basket from Bahman to Esfand 1393, with a price drop of about 30 percent (29.25 percent). Details of price changes for the items in the selected basket from Bahman to Esfand 1393 can be seen in Table 2. A seasonal analysis of the average price of the 10-item basket also shows a decrease in the weighted average price of these goods in winter 1393 compared to the same season of the previous year, indicating an average price decrease of 1.3 percent from winter 1392 to winter 1393. Among these 10 items, the highest price increase from winter 1392 to the last winter was for onions, which experienced a price increase of about 20 percent. The largest price decrease among this basket from winter 1392 to winter 1393 was for potatoes, which saw a price drop of over 26 percent (26.6 percent). This price analysis confirms that the government has succeeded in controlling the inflation rate and reducing it to less than 15 percent by the end of 1393, while also managing to control the prices of food and beverage items and even achieving a relative decrease in the prices of some of these items. The importance of the food and beverage commodity group in the household expenditure basket, especially for households with income levels below the average, makes controlling the price index of this group even more critical, which seems to have been taken into account by the planners and policymakers of the eleventh government.