Page 17 - IRANRptMar21

4.2​ Inflation 4.2.1​ CPI dynamics
Inflation in Iran to grow 30.5% in 2020, says IMF
Iran suffers high food inflation, country is ‘scrambling to buy wheat, corn, soybeans to shore up reserves’
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 now stands at 46.2% (compared with less than 10% at the point in May 2018 that Trump quit the nuclear deal) and 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.
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 March 2021, a senior agriculture ministry official, who asked not to be named due to the sensitivity of the matter, was cited as saying.
As a country of 83mn, Iran is one of the world’s largest consumers of bread. It requires around 16mn tonnes of wheat annually.
Competition for international commodities is heating up as governments move to buy more to shore up their reserves, spurred into action by lockdowns. They have slowed supply chains and triggered export curbs.
Iran’s economy is set to fall deeper into recession this fiscal year and foreign reserves could drop to $73bn by March, a loss of almost $40bn in two years, the Institute of International Finance (IIF) stated in January.
17​ IRAN Country Report March 2021 www.intellinews.com