Page 20 - IRANRptSep21

Latest Iranian annual inflation of 45.2% highest in 27 years
CURRENT TRENDS:
Iran’s consumer price index (CPI) annual inflation was posted at 45.2% in the fifth Persian calendar month (Mordad, corresponding to July 21- August 20), the Statistical Centre of Iran (SCI) reported on August 24. It was the highest figure recorded since 1994, when an official rate of 49.5% was registered.
The rate for food was 58%, putting pressure on poor and previously 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.
20 IRAN Country Report September 2021 www.intellinews.com