Iran Experiences Second Highest Inflation Jump Since WWII

During the Iranian government's one-year anniversary in August last year, President Ebrahim Raisi and officials in his administration claimed that their policies had resulted in a 20-percentage points reduction of the inflation rate - from about 60 percent to nearly 40 percent.

However, this statistic was incomplete and did not reflect the true situation.

Data published by the Central Bank of the Islamic Republic of Iran on March 26 shows that the Raisi administration has fallen short of its promises, with inflation reaching a new historical high.

Although the bank did not disclose the point-to-point inflation for March of last year, the figure can be extracted from the price index of the month, and the result is 63.9 percent.

That’s the fourth highest rate recorded after March 2020 (64.5 percent), March 2019 (65.2 percent), and February 2019 (65.3 percent).

As a result, Iranian government officials can no longer boast about reducing inflation.

The central bank reported that inflation for the Persian year ending on March 21, 2023, was 46.5 percent, the third-highest rate in the last 50 years. Higher inflation was recorded in 1995 (49.4 percent) and 2020 (47.1 percent).

Notably, this is the fourth consecutive year that the annual inflation rate has been above 40 percent.

According to a report published by Farday Eghtesad website, the average inflation rate for the past four years reached 44 percent, an unprecedented situation since World War II.

Iran is experiencing the second highest inflationary jump since the occupation of Iran in August 1941.

The central bank reported that the monthly inflation rate for March of last year was 6.6 percent, the highest monthly inflation rate since June 2014 (10.6 percent) when the currency was devalued.

The monthly inflation rate for October and November 2019, coinciding with a price shock in the free currency market, was recorded at 7.6 percent and 7.7 percent, respectively.

And the average annual inflation rate is expected to continue rising in the coming months, according to Shamsuddin Hosseini, the head of the parliament’s Budget Consolidation Commission.

According to the World Bank, Iran has the fourth highest food price inflation (73 percent), after Zimbabwe, Lebanon and Argentina.

The Statistics Center traditionally releases the previous month's inflation report on the first working day of each month.

But the center announced on March 26 that the report for the last month would be delayed.

The new Persian year is called the year of “curbing inflation and economic growth,” and any report indicating an increase in the inflation rate or a decrease in economic growth will conflict with Supreme Leader Ali Khamenei' wishes.

Thus, the manipulation of statistics and indicators aimed at fulfilling the desires of the highest political authority is a real concern.

In the past, publication of housing market statistics was also halted, leading to complaints and criticisms among economic experts.

Planning and decision-making without accurate and reliable statistics are impossible.

Previous statistical manipulations have only affected the credibility of the official statistics centers.