Friday , 19 July 2024

Iran’s Annual Inflation Nears 43 Percent, Goes Above IMF Forecast

Radiofarda – The Iranian Statistical Center has announced a on September 24 that the rate of inflation in Iran has reached 42.7 percent during the 12 months ending on August 23. This is nearly 3 percent higher than an IMF forecast in April.

The year on year inflation has been 41.9 percent for urban families and 47.4 percent for rural families, the Iranian Statistical Center announced.

Figures released by the Iranian Statistical Center should be treated with caution as the center, which is part of the Iranian government, is currently the only source for such figures, after the Central Bank of Iran was barred from releasing economic statistics to public.

Economists in Iran have frequently said that the statistical center has been observed to manipulate statistics in order to show the government’s performance in a good light./**/ /**/ /**/ SEE ALSO:Iran Lawmaker Says Inflation Has Hurt Hijab

Nevertheless, the state of the Iranian economy is so critical that earlier in September, the center announced the annual inflation rate for imported goods as 150 percent.

According to the latest statistics, the inflation rate has been 62.7 percent for food and beverages and up to 80 percent for tobacco, meat, fish and dairy products.

The Iranian Statistical Center has acknowledged that the inflation rates for these goods are much higher than the average rate of inflation for goods and services in the country during the past year.

In sectors such as services, education, water, electricity and fuel the year on year inflation rate has been between 22 to 30 percent.

It appears that the government has manipulated the figures for fuel as, for instance, the price of gasoline rises based on consumption while the Statistical Center calculates inflation rates based on a baseline rate. Frequent travelers have to pay up to twice as much for a liter of gasoline, because cheap gasoline is rationed and free market fuel is more expensive.

Iran’s inflation rate, which hovered around 10 percent picked up speed when the national currency began a steep dive in value against major currencies, as it became apparent the United States would impose sanctions. The currency is now threefold lower than two years ago.

In the housing sector the average rise in the price of houses has been 23.7 percent while rent has increased by 23.6 percent. However, the figures released by the government dramatically contradict figures released by other sources./**/ /**/ /**/ SEE ALSO:Iran’s Currency Unexpectedly Rises 10 Percent Pushing Stock Market Lower

For example, according to Tehran Housing Market, the prices of houses in Tehran suburbs have risen up to five times compared to last year. According to the Tehran Housing Market, the price of one square meter of residential land has risen by 148.6 percent, while the value of every one square meter of built-in area in derelict buildings increased by 82.2 percent during the past year.

Although the figures released by the Statistical Center and the Tehran Housing Market relate to different one-year periods, the less than 24 percent rise in the housing market between August 2018 and August 2019 is debatable and rather doubtful according to experts.

A rare announcement by the Iranian Central Bank about the price of housing in Tehran in August 2019, says every square meter of built-in area has been traded for 130 million rials which shows a 76 % increase compared to August 2018.

The Central Bank says during the five months starting March 21, the price of houses in Tehran increased by 96% compared to same period in the previous year.

Meanwhile, the Statistical Center has also claimed that the point to point inflation between late August to late September in 2019 compared to the similar period in the previous year has been 35% which means Iranian families have spent 35 percent more to purchase the same set of goods and services they did during the same period in the previous year.

The report says during the past month, inflation rate had a 6.6 percent decline compared to the same period in 2018. The officials argue that with the decline in the value of US dollar against Iranian currency rial, the pace of point to point inflation has been declining during the past two months.

The International Monetary Fund (IMF) forecast in April for Iran said Iran’s economy is expected to shrink by six percent this year and inflation could reach 40 percent, as the country copes with the impact of tighter U.S. sanctions.