Inflation in Aban; Central Bank 14.3; Statistical Center 13.1

The report from the Statistical Center of Iran regarding changes in the price index of goods and services consumed by urban households in Aban shows that the inflation rate continues its declining trend. According to this report, the average urban inflation rate in Aban 1394 reached 13.1 percent, which is a decrease of two-tenths of a percentage point compared to the average inflation rate for the 12 months ending in Mehr 1394. Based on the Central Bank's account of inflation changes in Aban, the average 12-month inflation rate ending in Aban 1394 reached 14.3 percent, indicating a decrease of half a percentage point compared to the previous report from the Central Bank regarding the average inflation rate for the year ending in Mehr. The Statistical Center of Iran's report indicates that the point-to-point inflation rate, which compares the inflation rate of Aban this year with that of Aban last year, has reached 10.8 percent, showing a decrease of one-tenth of a percentage point compared to the point-to-point inflation rate of Mehr this year. This index was recorded at 10.1 percent in the Central Bank's report for Aban, indicating a decrease of seven-tenths of a percentage point compared to the point-to-point inflation rate of Mehr announced by the Central Bank. Another index mentioned in both the reports from the Statistical Center of Iran and the Central Bank is the monthly inflation index for Aban, which was assessed as stable at seven-tenths of a percent in both accounts. However, while the seven-tenths of a percent monthly inflation rate in the Statistical Center's report experienced a slight decrease of one-tenth of a percentage point compared to the monthly inflation rate of Mehr 1394, the same monthly inflation rate in the Central Bank's report showed an increase of one-tenth of a percentage point when compared to the monthly inflation rate of Mehr assessed by this institution. By comparing the changes in monthly inflation rates and average inflation over the past months, it becomes clear that although the changes in the price index of goods and services consumed in urban areas of Iran during Aban 1394 have maintained their declining trend, this decline is slower than in previous months, and from Mehr to Aban 1394, the decrease in various inflation indices has been minimal. Chart one shows the trend of changes in the point-to-point inflation rate and average inflation over the period from Farvardin 1391 to Aban 1394, as reported by the Statistical Center of Iran. This chart indicates that the upward or downward movement of the point-to-point inflation rate affects the average inflation rate with a two-to-three-month delay, and the shape of changes in average inflation and point-to-point inflation is similar. Based on this and considering the past 44 months' trend, it can be predicted that the trend of changes in average inflation in the coming months will also maintain a downward trajectory, albeit at a slower pace than before. The details of the Statistical Center of Iran's report on the price index of goods and services consumed by urban households in Aban 1394 indicate that the main burden of the 13.1 percent inflation rests on the changes in the price index of 'non-food goods and services,' which increased by 14 percent, while the 12-month inflation index for 'food, beverages, and tobacco' grew by 10.9 percent. According to this report from the Statistical Center of Iran, the price index for the 'food and beverages' group increased by 11.1 percent in the 12 months ending in Aban 1394, with a weight of over 25 percent in calculating the overall inflation index, which is considered relatively high. In this report, the highest growth in the 12-month price index ending in Aban 1394 among various groups of goods and services was recorded for the 'water, electricity, and fuel' group, which grew by 36.8 percent during this period. Following this group, the average inflation for the 'education' service group increased by 17.6 percent, and the average inflation for the 'health and medical' group rose by 16.8 percent. In examining the details of the Central Bank's report on changes in the price index of goods and services consumed in urban areas of Iran during Aban this year, the price index for the 'food and beverages' group experienced a 6.4 percent increase in Aban this year compared to the same month last year. The monthly inflation rate for this group was also recorded at six-tenths of a percent, similar to the monthly inflation rate of the overall inflation index. The highest point-to-point inflation rate among the main groups examined was attributed to the 'health and medical' group, which saw an increase of more than 21.9 percent in Aban 1394 compared to Aban last year. Following this group, the price index for the 'education' group increased by approximately 21 percent, and the price index for 'restaurants and hotels' rose by more than 15 percent. An examination of the price changes of the selected goods basket by Radio Farda in Aban 1394 compared to Mehr this year shows that the average price changes of this basket have intensified compared to previous months. The average price of this basket, which mainly includes essential and commonly used household goods, increased by 4.38 percent from Mehr to Aban this year. The highest price increase, exceeding 38 percent, was related to tomatoes, while the largest price decrease, exceeding 11 percent, was related to chicken meat. Details of the price changes of these 10 items over the past month can be seen in Table 1. Changing the basis of comparison for the prices of items in this basket from Mehr this year to Aban last year, which examines the year-over-year price changes of the selected items, yields a different result, showing an average price change of a decrease of 2.5 percent over the past year. The largest price decrease among these items was related to potatoes, which experienced a price drop of more than 15 percent during this period. The record increase in price among these items from Aban last year compared to the same month this year was for boneless beef, which registered an increase of about 10 percent during this period. Further details of the price changes of the items in the selected goods basket by Radio Farda during this two-year period can be tracked in Table 2. In Table 3, with the basis of comparison for the prices of these items changed to Aban 1392, the downward trend in the average price of these goods changes to an upward trend. The average price changes of the selected goods basket by Radio Farda from Aban 1392 to Aban this year experienced a growth of 5.8 percent. Among these items, the highest price increase was attributed to onions, which saw a price increase of about 40 percent during this period. The highest price decrease was for potatoes, which became 22.5 percent cheaper during this two-year period. Price changes for other items in the selected goods basket by Radio Farda during this two-year period can be seen in Table 3. Both reports from the Statistical Center of Iran and the Central Bank on changes in the price index of goods and services in Aban emphasize the continuation of the downward trend in the inflation rate; however, the monthly inflation rate of seven-tenths of a percent and the slowing of this movement could signal increasing difficulties for the government in maintaining this trend. Especially since the government's approach to adopting anti-recession policies unveiled in the anti-recession policy package could double the risk of a shift in inflation towards an increase. The approach to the end of the year, which is traditionally associated with rising prices for certain goods and products and accelerated money circulation in the Iranian economy, could also play a role in exacerbating this trend. Additionally, the relative and limited fluctuations in the exchange rate, as an important price index affecting the prices of other goods, which has also been observed with the strengthening of the dollar index in global markets, raises concerns about the persistent inflation in the Iranian economy more than before.