At a time when Tehran continues to expand its nuclear program, the inflation rate shows that it is at the top of the chronic crises of the Iranian economy, in light of the economic stagnation, reinforced by the influence of the pressures of the nuclear file, bringing the actual inflation to the highest level in 26 years.
According to the Iranian Statistical Center, the average inflation rate in Iran during August with an annual comparison was 45.2%, and the figure was 44.5% for urban households and 48.7% for rural households.
Inflation in Iran has risen steadily since President Donald Trump withdrew from the 2015 nuclear deal, according to the American Institute for Defense of Democracy.
In 2020, inflation fell in relative numbers as deflation dominated the global economy due to the massive slowdown associated with the pandemic.
However, in 2021, the global deflation began to abate, and inflation in Iran exceeded its level in 2019.
According to the report, the record high inflation stems in part from the rise in the prices of imported Iranian goods. According to the Iranian Statistical Center, the import price index rose by 505.9%; The dollar-denominated index averaged 58.6%.
This increase in import prices leads directly to inflation in two ways, the first is to raise the prices of imported consumer goods, and the second is to raise the prices of imported inputs used by local manufacturers to produce goods.
The huge increase in the import price index is partly due to the depreciation of the rial, as the price of the US dollar in Iran reached 161,400 thousand riyals on April 30, 2020.
A year later, the US dollar was traded for 232,500 thousand riyals, and on September 10, 2021, one US dollar was traded for 278,800 thousand riyals.
The Producer Price Index (PPI) also rose, and the Producer Price Index rose in Spring 2021 by 73%. The annual producer price inflation rate remained at 60.4% and the quarterly rate was 10.1%.
Besides inflation, other economic indicators for Iran are sending mixed signals about the country’s economy. The labor market has improved slightly compared to last year as the initial COVID-19 shock has faded.
In the spring of 2021, the number of workers in Iran increased by about 400,000 compared to the spring of 2020, yet the number of workers today is 1.5 million less than it was in the spring of 2019.
The unemployment rate was 8.8% in the spring of 2021, but the work participation rate – which reflects people who have or are looking for a job – was only 41.4%.