Page 22 - IRANRptJun22

Inflation in Iran announced at 42.4% on same day report is released on ‘weaponisation by US of price growth’
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 US sanctions, a report issued by the Sanctions and Security Project said Washington’s "maximum pressure" campaign—introduced by the former Trump administration—that imposed crippling sanctions to hurt the Iranian economy and challenge Tehran's regional role was a "weapon" that had only succeeded in making life for Iranians more difficult.
Esfandyar Batmanghelidj, a visiting fellow at the European Council on Foreign Relations and author of the report, told Middle East Eye that it was clear that sanctions, often seen as an alternative to military confrontation, had triggered persistent high inflation which "led to a marked increase in poverty" in Iran. "As much as it is possible to boil everything down to one impact that tells the whole story, inflation ends up being that one impact," the publication cited him as saying.
Since in May 2018, then US president Donald Trump announced he had decided to reimpose wide-ranging and swingeing US sanctions on the Islamic Republic, the Iranian rial (IRR) has sunk to around 270,000 to the dollar. In 2015, when the nuclear deal, or JCPOA, was signed by Iran and six major powers, 32,000 rials bought $1.
The price of basic food items such as milk, yoghurt and eggs has soared by more than 150%, while the cost of healthcare has jumped by around 125%. Batmanghelidj said that wages in Iran had remained steady throughout the period of sanctions driving up inflation, but did not match the realities of the cost of inflated prices and the severely depreciated currency.
Iran’s government last year claimed US sanctions had caused $1 trillion worth of damage to the country's economy.
The report observed: "Although no sanctions were imposed on food imports, this drop in the Rial seriously affected the affordability of food.
"Because the Central Bank did not have clear access to foreign exchange reserves, it could not meet the demand to provide hard currency to importers
22 IRAN Country Report June 2022 www.intellinews.com