Are Iran’s official inflation statistics real?

Analysis by PMOI/MEK

Iran, July 1, 2021—The Iranian regime constantly downplays inflation rate reports to save face and put a lid on its disastrous management of the country’s economy.

According to economic experts, Iran is the only country in the world that has had double-digit inflation rates for more than four decades. Also, according to these experts, double-digit inflation means the rapid spread of poverty among the people and the destruction of economic and social structures.

“Part of the country’s problems is 500 to 700 percent inflation,” said Hassan Hemmati, a member of Majlis (parliament), according to the official ILNA news agency on May 18.

Statistics published by the Ministry of Industry, Mine and Trade, show that the prices of some items such as oil, rice, and beans have increased by more than 100 percent in 2020, some prices have increased between two to four times, and 41 items have seen a price increase of more than 50 percent.

In a June 27 article titled “Inflation and empty tables,” the state-run Etemad daily wrote: “Monthly inflation no longer makes sense these days, and weekly inflation, and perhaps daily inflation, is more tangible. Inflation, which is breaking its 27-year record, announces unfortunate events!

“Inflation, although seemingly an economic issue, will have social, cultural, and even political consequences over a longer period of time. According to the Social Security Administration, 30 million people are in absolute poverty, which means that the country needs to make decisions quickly, otherwise the damage caused by this inflation will occur in many areas and will be irreparable.”

On June 26, Jahan-e Sanat, a state-run newspaper that follows economic developments, report, “Statistics show that the increase in food prices and services continues uninterrupted, so that cooking oil in June has increased by 112 percent compared to the same period last year.

“The highest record according to the statistics of the Statistics Center of Iran in June compared to the same period last year belongs to cooking oil and fat with 112.7 percent; followed by juices and beverages with 79.6 percent; and milk, cheese and eggs, which have become 78.2 percent more expensive. Fish price has increased by 74 percent, sugar 69.6 percent, and meat 69 percent.”

Even though the government is constantly downplaying inflation, the media and government economists acknowledge that Iran ranks sixth in the world and has the highest inflation after Venezuela, Zimbabwe, Argentina, Sudan and South Sudan.

Basic goods include more than about 1,300 to 1,400 items, which are taken into account when calculating average inflation and costs, and among these items. In this regard the cost of products that are used more often plays a more important role in inflation.

But the regime only uses 360 items to calculate average inflation, and it has eliminated high-consumption items such as tea, clothes, and shoes, and has instead included irrelevant items in its calculation.

The government entered items such as travel tours, foreign leisure tours, marriage and divorce certificate fees, car purchase and sale certificate fees, chips, chewing gum, musical instruments, volleyball and similar items and calculate their average price to calculate inflation.

On April 8, 2020, Jahan-e Sanat quoted economist Mohammad Gholi Yoosefi as saying, “The indices presented by the Central Bank and the Statistics Center as price indices are in fact an average of 300 to 400 items that have no scientific basis and cannot indicate the status of inflation or changes in price indices in the economy.”

In the winter of 2020, the livelihood basket of the working family was priced at 60.895 million rials (about $276) in the official meetings of the Supreme Labor Council.

According to state-run media reports, in March and April, 17 million rials (about $68) were added to this basket and the household livelihood basket has reached more than 80 million rials (about $320).

With the same official calculations, workers and minimum wage earners are more than three times below the poverty line, but the real poverty line is more than 100 million rials (about $400), and in fact, workers and minimum wage earners are more than four times below the poverty line.

The increase in the price of food and basic necessities in the first two months of Persian new year (starting from March 20) destroyed all the salary increases of the workers and many of the employees that the regime had planned.

According to the Statistics Center, the point-to-point inflation rate in June reached 47.6 percent, which has increased by 0.7 percent compared to May. In other words, the country’s households have spent an average of 47.6 percent more than in June to buy a “set of identical goods and services,” according to a June 23 report by the Setareyeh Sobh daily.

There are more than 170 countries in the world where the inflation rate is in single digits and there are more than 150 countries where inflation is below five percent.

Even though Iran has between 8 and 10 percent of the world’s natural resources against one percent of the world’s population, inflation and poverty are on the rise in the country. Today, even the situation of a war-torn country like Iraq is better than Iran.

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