Page 20 - IRANRptFeb22

Inflation in Iran announced at 42.4% on same day report is released on ‘weaponisation by US of price growth’
approve scrapping the rate because the draft bill was “ambiguous” and the government had not explained how it would make up for the removal of the rate, which is more than five times cheaper than the open market rate.
The Iranian state has spent roughly $8bn a year since 2018 on subsidising food imports to offset inflationary pressures on the populace; however, in recent months the accumulated stresses caused by US sanctions—including the blocking of Tehran’s assets abroad by the threat of secondary sanctions aimed at international financial system players—have left the government’s coffers decidedly bare.
If the cheap dollar rate was entirely eliminated, prices across the country in the wholesale market could increase by five to six times.
Iran on January 27 announced annual inflation of 42.4% in the 10th Persian month (ended January 20), while on the same day analysts were digesting a new report on how price growth in the country has been “weaponised” by the imposition of US sanctions.
The consumer price index (CPI) inflation figure released by the Statistical Centre of Iran (SCI) was a modest improvement on the 43.4% recorded in the 9th Persian month. Food, beverage and tobacco prices moved up 1.7% m/m, while services and non-food prices gained 2.7% m/m.
Pinning the blame for the sharp rise seen in Iran’s inflation in recent years on
20 IRAN Country Report February 2022 www.intellinews.com