The goods and services Consumer Price Index for urban areas in the 12 months ending July 21, which marks the end of the Iranian month of Tir, increased 9.2% compared with last year’s corresponding period, according to the latest report released by the Central Bank of Iran. The CBI put the inflation rate for the preceding month (Khordad), which ended June 20, at 9.7%. The overall CPI (using 2011 as the base year) stood at 242.8 in Tir, indicating a 0.8% increase compared with the previous month. The index registered a year-on-year increase of 8.1% compared with the similar month of last year. Earlier, the Statistical Center of Iran put the inflation rate for Tir at 9%.
Many of economic analysts have expressed concerns about the increasing inflation in next coming year. It seems this increasing is due to liquidity growth in past 4 months and in compare of previous year liquidity increased around 30 percent. By this trend maybe the year to year inflation rate will become more than 10 percent for next 3 months.
Rouhani’s government has been defined the target of controlling the inflation when they started their work, in those days, inflation rate was around 40 percent and by controlling inflation expectations, decreasing the foreign exchange rate and postponing demands of consumers by high interest rate they tried to control the inflation and thy were successful about this issue.
But in last year the liquidity index had 30 percent growth and it crossed 10,000 trillion Rials, this happened because government and central bank tried to control economic recession by monetary policy and central bank increased supplying money and monetary base by governmental debt.
The consumer price index report contains 12 main sector and this sectors are: food and beverage, tobacco production, clothing, housing, healthcare, transportation, telecommunications, entertainment, education, restaurant, others.
From these sectors healthcare had highest monthly inflation rate that was 5.1 percent and year to year inflation rate of this sector was 15.9. this sector weights 7% of Iran’s economy. The biggest sector of Iran’s economy is housing and fuel and this sector experienced 0.5 percent monthly inflation and 9.9 percent year to year inflation.
In this condition many economists believe if Iran doesn’t attract any foreign investors and if government couldn’t control economic recession the inflation rate will increase up to 10 percent again and it will ruin most of the economic achievement of Rouhani’s government.