TEHRAN — The Central Bank of Iran reported an annual inflation rate of 77.2 percent year-on-year for the period between April 21 and May 20. Monthly inflation during the reported period increased by 8.5 percent. This inflation rate is the highest recorded in the country since 1942.
Point-to-point inflation for goods reached 113 percent. The price of a kilogram of rice increased from approximately 1.8 million rials a year ago to over 5 million rials. Similarly, the cost of a bottle of cooking oil increased from approximately 700,000 rials in the spring of the previous year to over 3 million rials.
Arman Khaleghi, the head of Iran's Chamber of Commerce, Industries and Mines, identified several factors impacting the economy. He cited the elimination of a subsidized exchange rate, domestic protests, a military conflict, annual wage and energy price increases, and a naval blockade as concurrent influences. Khaleghi stated, "The decision to raise wages and salaries was intended to compensate for the effects of the removal of the preferential currency rate and to preserve the purchasing power of the working class. However, the increase, which seemed substantial on paper, proved entirely insufficient in reality."
A retiree identified as Mashhadi Firouz described the current economic conditions. He said, "Daily shopping trips have turned into something resembling a reconnaissance mission to find out the new prices." Firouz said, "My pension does not even cover a third of the household expenses." A housewife named Fatima stated, "Red meat has become a dream, chicken has become a mere guest on our table, and I have even started counting eggs one by one."
A grocery seller named Mehran observed a decline in purchasing power. He stated, "Purchasing power has collapsed, and people are now buying only the essentials. Prices have doubled in less than four months, so we had to reduce the quantities offered, but we cannot find anyone to buy them." Khaleghi also commented on the impact of external events, saying, "Even the mere news of a ship being targeted immediately raises prices, let alone the existence of actual difficulties and palpable shortages that have forced the search for more expensive alternative land routes." He said, "Tax revenues, which were supposed to offset part of the cost of the preferential currency reforms, are also shrinking."