The Trend of Decreasing Inflation Rate Continued in November

The report from the Central Bank and the Statistical Center of Iran regarding changes in the inflation rate in November shows that the trend of decreasing inflation has continued in mid-autumn 1395 (2016). According to the Central Bank's report on the consumer goods and services price index in urban areas of Iran in November 1395, the average inflation rate for this month reached 8.6 percent, experiencing a decrease of one-tenth of a percentage point compared to the average inflation rate in the previous month. In the report from the Statistical Center of Iran on the price index of consumer goods and services for urban households in November of this year, published a few days ago, the inflation rate for the twelve months ending in November 1395 was announced as 7.5 percent, which is four-tenths of a percentage point lower than the average inflation rate for October. The Central Bank's report indicated a monthly inflation rate of 0.6 percent for November, which is two-tenths of a percentage point higher than the monthly inflation rate for October. The monthly inflation rate for November 1395, according to the Statistical Center of Iran, was reported as 0.3 percent, while the monthly inflation rate for October was announced as 0.7 percent, indicating a downward trend in the monthly inflation rate for November. The Central Bank's report on changes in the price index for November announced the point-to-point inflation rate for this month as 9.1 percent. The point-to-point inflation rate in the Central Bank's report for the general price levels in October was announced as 9.3 percent, indicating a continued downward trend in the point-to-point inflation rate. The changes in the point-to-point inflation rate in the Statistical Center of Iran's report also showed a downward trend, with the point-to-point inflation rate in November reaching 6.1 percent, which is half a percentage point lower than the point-to-point inflation rate for October. In the Central Bank's report on price changes in November, among the main groups, the highest point-to-point inflation rate, with a growth of 17.2 percent, was attributed to the 'Health and Medical' group, which has typically experienced the highest price growth in all previous months. Following health and medical, the price index for the main group 'Education' saw an increase of 11.4 percent in the reported month. The groups 'Recreation and Cultural Affairs' and 'Tobacco' also recorded increases of 11.1 and 10.2 percent respectively, ranking next in the highest price index growth among the main groups. According to the Statistical Center of Iran, the highest average inflation rate, recorded at 14.1 percent, was related to the 'Education' group. After the education group, the 'Health and Medical' group ranked second in terms of the highest growth rate, with a twelve-month inflation rate of 10.1 percent in November. A detailed review of both reports confirms that in the reported month, as in previous months, service inflation was fundamentally higher than goods inflation. The continued trend of decreasing inflation occurs amidst concerns about a nearly 30 percent growth in liquidity and the inflationary effects of this growth rate, which has become a concern for experts and economic activists. These experts believe that if the government's and the Central Bank's programs to stimulate Iran's economy prove effective, the 30 percent growth in liquidity could lead to a significant increase in the inflation rate.