Iranian Employees' Salaries to Increase by Up to 5% in 2018

The Iranian Organization for Planning and Budget has issued a budget directive for forecasting the resources and expenditures of executive agencies for the coming year, mandating that these agencies predict a salary increase of up to five percent. According to a report on Thursday, October 6, by ISNA news agency, agencies that prepare their budgets based on performance budgeting can allocate five percent from savings and the implementation of this type of budgeting as other payments for salaries. The news agency noted that the five percent salary increase is based on preliminary forecasts and must ultimately be approved by the Cabinet and presented to the Parliament as part of the budget bill. The proposed salary increase comes at a time when the Statistical Center of Iran reported an inflation rate of nearly eight percent in August. Nevertheless, Valiollah Seif, the head of the Central Bank of Iran, reported on September 7 that the trend of 'decreasing point-to-point inflation as a leading indicator of inflation' has been observed, stating that 'the inflation rate based on the 2016 base year has dropped from 9.4 percent in July to 8.6 percent in August of this year.' Mr. Seif expressed hope that 'with the continuation of the decreasing trend in point-to-point inflation, the inflation rate will remain at single-digit levels.' However, according to Tasnim news agency, he indicated that the inflation rate trend in the early months of this year has been 'increasing,' raising 'serious concerns about the return of inflation to double-digit levels.' ISNA reported that the percentage increase in salaries for employees in 2014, the first year of the eleventh government, was 20 percent, which decreased to 14 percent the following year and to 10 percent in 2016. The report shows that the minimum salary for employees has increased from 490,000 tomans in 2013 to 1,035,000 tomans this year. Additionally, the average salary for employees has risen from 1,470,000 tomans to 2,970,000 tomans. According to official reports, the monthly living cost for a household in Iran exceeds three million tomans annually. ISNA also noted that the salary increase for those covered by labor law has also been set at five percent, with the final figure needing approval from the High Labor Council. However, this section was later removed from the agency's report. Currently, the minimum monthly wage for workers in Iran is 930,000 tomans.