Page 5 - IRANRptAug22

The National Iranian Oil Co. (NIOC) and Russia’s Gazprom on July 19 signed a memorandum of understanding (MoU) covering investment worth around $40bn.
Iranian President Ebrahim Raisi and Russian counterpart Vladimir Putin have voiced their wish to pursue de-dollarisation in global trade during Putin’s visit to Tehran on July 19. Raisi remarked on June 29 that an independent financial system would make it "impossible for any country to exert influence or pressure on it".
As Russia deepens ties with Iran, US officials monitor what they have claimed is an Iranian plan to supply Russia with several hundred drones, including some that are weapons-capable and surveillance drones, for use in the heat of battle in Ukraine. Washington is also keenly aware that Moscow and Tehran are accelerating and building trade and investment links that will help the Kremlin counter impacts of Western sanctions imposed in response to the war.
The Iranian rial (IRR) hit a record free market low of 332,700/$ on June 12 as market sentiment further soured on prospects for the talks aimed at keeping alive the nuclear deal. The euro and the pound sterling also fell to all-time lows at IRR349,900 and IRR400,000, respectively. The pound broke the 400,000 barrier for the first time in 2022.
The worsening “street rate” of the dollar and other hard currencies in Iran are a further burden to the consumer faced by painful inflation, officially at around 40%. Prices for wheat-based, dairy and pasta products in Iran have been rising at a far faster rate.
Iran’s official annual inflation rose 13.2 pp to a record 52.5% in June from 39.3% in May, the Statistics Center of Iran (SCI) announced on June 28. Price growth in food, beverages and tobacco grew by 32.2 pp to 81.6% in June, while nonfood goods and services prices moved up by 2.8 pp to 36.8%.
At least 53 people were on July 29 confirmed dead amid landslides and flash floods caused by heavy rainfall in Iran, officials said. Iran has endured persistent drought in recent years that leaves sun-baked earth. When torrential rain falls on such ground there is high susceptibility to floods. Floods caused damage estimated at more than $2bn.
Social tensions in Iran have risen amid surging inflation, including steep hikes in food prices, and a series of strikes mounted by workers including teachers and bus drivers in Tehran. In the past year, the country has also been hit by protests over water shortages.
The blow to Iranian consumers came after Iranian oil and petrochemical workers began a strike for higher wages, with their industries becoming the latest of several in Iran to be plunged into turmoil by cost-of-living protests.
Looking ahead, the World Bank in the June edition of its Global Economic Prospects report has upgraded its 2022 GDP growth forecast for Iran to 3.7% from the 2.4% it anticipated six months ago, citing higher oil prices. Nonetheless, the institution observed the threat that drought poses to Iran as well as a growing number of cost-of-living protests which saw its official inflation rate remain elevated.
5 IRAN Country Report August 2022 www.intellinews.com