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4.2 Inflation 4.2.1 CPI dynamics
Inflation in Iran down 2pp to 27.8% y/y
Iran suffers high food inflation, country is ‘scrambling to buy wheat, corn, soybeans to shore up reserves’
Average consumer price index (CPI) inflation in Iran stood at 27.8% y/y in the fourth Persian calendar month (ended June 20), the Statistical Centre of Iran (SCI) has announced.
However, recent days have seen the Iranian rial (IRR) collapse against the dollar and a basket of other currencies in recent days, thus Iranians may already be experiencing a higher rate than that. Average inflation in the previous Persian month was measured at 29.8%.
The IRR by June 24 stood at IRR196,500 to the dollar in Ferdowsi street unofficial market trading by the end of the business day, according to Bonbast.com. The previous day brought an all-time low of IRR205,000.
Food and beverages CPI in the latest SCI inflation report was given as 27.4% y/y, up 2.4% m/m.
Iran’s annual inflation rate for foodstuffs, drinking water, beverages and tobacco products was more than 42% in the 12-month period ending March 20, the Statistical Center of Iran (SCI) said on May 7.
The rate of inflation in the non-food and services categories stood at 31.4%, it added.
The severe depreciation of the Iranian rial (IRR) in the face of US sanctions is driving high inflation rates in Iran.
Also on May 7, Reuters reported that Iran is scrambling to buy millions of tonnes of wheat, corn and soybeans to shore up its reserves. The news agency quoted Iranian officials and traders as disclosing the situation as a reality despite President Hassan Rouhani’s assertions that the coronavirus (COVID-19) crisis would not endanger food supplies to the Middle Eastern country.
The urgency has reportedly prompted Iran to alter its approach to buying commodities, seeking out direct contracts—rather than announcing international purchasing tenders— with smaller-sized trading houses.
Iran needed to import 4mn tonnes of wheat, 1.5mn tonnes of barley, 700,000 tonnes of raw sugar and 4mn to 5mn tonnes of corn, in the Iranian year ended
19 IRAN Country Report October 2020 www.intellinews.com
