The governor of the Central Bank, Mahmud Bahmani, said the inflation rate, measured as the average over the last 12 months, came to 17.2 percent in the Persian month of Mordad (July 23-August 22), up from 16.3 percent in the previous month.
The inflation rate has now increased for 12 straight months since bottoming out at 8.8 percent in Mordad of last year. While many in Iran blame the rise in inflation on the removal of subsidies and while that removal certainly contributes to the scale of inflation today, the fact is that inflation started heading upward four months before subsidies were curtailed last December 19.
Bahmani said that in the previous month of Tir the share of subsidy removals in the 16.3 percent inflation rate was 4.5 percentage points directly and 1.9 percent indirectly, which would put underlying inflation at 9.9 percent, still a hefty rate.
The Central Bank stopped issuing its seven-page monthly inflation report in April. Since then, an official of the bank has announced the one figure of the 12-month average each month with no backup detail.
The bank in the past also announced the inflation rate as compared with the same month of the previous year. That figure has since been announced for one month, as shown in the accompanying chart. That figure tends to be a leading indicator—that is, it tends to rise or fall a few months before the 12-month average figure rises or falls, as can be seen in the accompanying chart. And that would appear to indicate that the 12-month average inflation rate should soon begin to decline.
That would also suggest it would be in the regime’s interest to release the other number each month. Why it has not done so is unclear.
The CIA Factbook posting of inflation rates around the world shows that Iran has the sixth highest rate among 222 economies in the world. The CIA’s published rates are for 2010. They show the only countries with rates higher than Iran’s current 17.2 percent are Eritrea at 20 percent, Guinea at 20 percent, Argentina at 22 percent, Congo at 26.2 percent and Venezuela at 28.2 percent.
The Iranian media have not been reporting how few countries have inflation rates higher than Iran’s.
A few weeks ago, Bahmani predicted that Iran’s inflation rate would soon fall and that it would achieve its goal of inflation in single digits in the next Iranian calendar year.
Ayatollah Nasser Makarem-Shirazi, a staunch conservative, condemned inflation in his Eid-e Fitr sermon last week. “I do not care about statistics,” he said. “Every day about 2,000 letters and messages are received at our office. Many complain about inflation and other problems.” He said it is not proper to say that everything is doing well and “to close our eyes to realities.”
