Iran’s monthly inflation hits record high

New data released by the Statistical Center of Iran confirms inflation has reached an unprecedented level.

25 June 2022
ID : 33825
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New data released by the Statistical Center of Iran confirms inflation has reached an unprecedented level.

Food prices increased by 25.9% in the third month of the current Iranian year (May 22-June 21) compared to the previous month.

The record high monthly inflation came after the government decided to overhaul the import subsidy system.

The government move saw the abolition of the controversial practice of allocating cheap dollars at the rate of 42,000 rials per dollar, locally known as the Preferential Foreign Currency, to import essential goods, including corn, soymeal, unprocessed oil, oilseeds and barley, in addition to wheat, flour and medicine.

Instead, it is depositing cash directly to the account of income deciles 1 to 9.

The market value of the dollar is above 300,000 rials now.

“Until now, we have been paying to producers [read importers] but now the subsidies go to consumers. In fact, the Preferential Foreign Currency has not been ceased, rather the allocation method has changed,” President Ebrahim Raeisi said in a televised speech on the eve of the introduction of the move last month.

In his speech, Raeisi emphasized that the removal of cheap dollar allocation will not lead to a price rise in wheat, flour, medicine and petrol.  

However, the move has led to dramatic rise in the prices of essential goods.

Also known as necessity or basic goods, essential goods are products consumers will buy, regardless of changes in income levels.

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