Page 16 - IRANRptMar19

4.2 Inflation 4.2.1 CPI dynamics
Iran’s central bank decides to stop publishing inflation data as CPI hits 42% y/y
Central bank yanks figure
Iran’s consumer price index (CPI) inflation rate in the 10th Persian calendar month (ended January 20) reached 39.6% y/y, according to the Statistical Centre of Iran (SCI).
The collapse in the value of the Iranian rial (IRR) in the face of the reimposition of the heavy sanctions regime aimed at Tehran by the US has pushed up the rate by more than 20 percentage points in the 2018/2019 Persian year to date. The currency stood at around 60% weaker against hard currencies by the market close on January 23, compared to where it was at the start of this year. One dollar on the free market cost IRR120,000, according to Bonbast.com. A recent lira rally had seen the rate approach IRR100,000.
Inflation in the ninth month of the Iranian year (ended December 21) was 37.4%, SCI data shows. Month on month rises in inflation are slowing at least. Rural areas in Iran have been worse hit by inflation in recent months. The SCI figures determine a 10th month annual rate of 42.7% for rural areas, while urban inflation was seen at 39%. The figures do not include property prices, which rose 90% y/y, according to another SCI report.
“Food and beverages and tobacco” CPI inflation stood at 56.1% y/y, the statistical body’s inflation report noted.
Until lately, the Central Bank of Iran (CBI) each month published its own set of inflation data. But that practice came to an abrupt halt recently. The CBI website briefly advised that CPI inflation in Iran had touched 42% . The page with the figure was suddenly yanked, after which the national lender said it would be releasing inflation data no more.
Some foreign academics claim that realistically Iran’s annual inflation rate should be measured as running at beyond 200%. For instance, on November 27, Johns Hopkins University economist Steve Hanke recorded the rate at 218% y/y. However, he has come under some criticism for basing his calculations solely on the Bonbast.com free market exchange rate. Some observers say the site is providing unreliable unofficial data and that more nuanced data is needed when calculating inflation.
In mid-November, the IMF predicted that annual inflation in Iran would leap to more than 40% by the end of 2018. At the time of the forecast, various data from official statistics agencies in the country showed Iran’s inflation rate running just north of 30% y/y . The IMF measured Iran’s 2017 consumer price growth at 9.6%.
16 IRAN Country Report March 2019 www.intellinews.com