September 06, 2019
The inflation rate dropped markedly last month, suggesting the country’s horrific inflation of recent months may be coming to an end. However, even with the vast improvement of the latest month, Iran’s inflation rate remains the third worst in the entire world.
The Statistical Center of Iran said that the annual inflation rate as of the end of Mordad on August 22 stood at 41.6 percent compared with the same month last year. That was down very substantially from 48.0 percent the previous month.
However, even at 41.6 percent, the rate is huge for Iran, as can be seem from the accompanying chart, which shows the monthly rates for last 11 years.
Furthermore, of the 227 economies for which the CIA publishes inflation estimates, Iran ranks 225th. Only South Sudan and Venezuela currently suffer more inflation than Iran, even with the latest improvement.
When inflation is calculated another way, as a 12-month average, inflation is still rising, standing at 42.2 percent as of Mordad, up from 40.4 percent the previous month. But the year-on-year figure is the best measure.
The Statistical Center touted the fact that the rate as calculated year-on-year is now below the rate calculated as a 12-month average. And that is indeed important. As can be seen at the far left of the chart and in the middle of the chart, when that happens, it usually means inflation is on a long-term decline.
However, Iran is still a long way from having an inflation rate below 10 percent, something achieved only for brief periods in the last 11 years. But even if Iran gets its inflation rate down to 10 percent, that won’t be all that impressive globally. Of the 227 economies tabulated by the CIA, only 22 or 10 percent have an inflation rate currently exceeding 10 percent.
When Iran gets inflation down to 10 percent, it will a major achievement for the Islamic Republic, but nothing to boast about anywhere else in the world.
