Page 20 - IRANRptOct21

Inflation in Iran to grow 30.5% in 2020, says IMF
middle-class Iranians hammered by the impacts of coronavirus (COVID-19) shutdowns and US sanctions. SCI reported that the fastest inflation hikes occurred with food and beverages and tobacco, especially given price rises of vegetables, dairy products, eggs and bread.
OUTLOOK: There are signs that Iran is pulling out of recession, but for quick progress—and a big alleviation in inflation—the Islamic Republic needs a deal that will see US sanctions scrapped. Tehran, having put up painful economic resistance to Trump, will not want to lose face in agreeing one, though.
The Central Bank of Iran (CBI) does not use a benchmark interest rate. Instead, it sets bank profit rates for lending and borrowing. In FX, there are fixed official rates and the more realistic floating free market rates. Official lending of USD and other hard currencies is restricted to approved recipients such as traders bringing in key imports.
Iranian consumer prices in 2019 rose 41% and were on course to grow 30.5% in 2020 and 30% in 2021, the IMF said. However, the official annual inflation rate increased to 47.6% in June 2021 from 46.9% in the previous month due to rising food prices. Price growth is very unevenly spread among the various goods and services categories. Food and drink price growth is alarming to many Iranians, with complaints cited by UPI that chicken, rice and egg prices have nearly doubled over the past year while fresh fruit, beans and vegetable oil prices have increased by around threefold.
4.2.2 PPI dynamics
Iran’s autumn PPI turns negative for first time in four years
Iran’s producer price inflation (PPI) stood at -2.3% in the autumn period (September-December), marking the first negative reading for four years, the Iran Chamber of Commerce, Industries, Mines and Agriculture (ICCIMA) announced on February 1.
According to the data—compiled by the Statistical Center of Iran (SCI)—the lowest figure was recorded for the coal industry and oil refineries (-10.7%). Next were paper and paper products (-4.6%) and petrochemicals (-2%).
The highest inflation rates in industry were for office and computing appliances (26.6%), garment production, processing, and dying (9.5%) and transportation equipment production (7.8%).
20 IRAN Country Report October 2021 www.intellinews.com