Rich-Poor Inflation Gap Widening

The average annual inflation gap measured by the Statistical Center of Iran between the first income decile (those with the lowest income) and the 10th decile (those with the highest income) increased 0.3% to reach 2.7% in the Iranian month Dey (Dec. 22, 2018-Jan. 20) compared with the previous month’s 2.4%.

The average goods and services Consumer Price Index in the 12-month period ending Jan. 20, which marks the end of the Iranian month of Dey, increased by 19.6% for the first decile whereas it rose by 22.3% for the 10th decile.

The fourth and fifth deciles saw their 12-month average inflation rate grow by 20.8% compared with last year’s corresponding period. The rate for the second decile increased by 20.5% in Dey, third decile 20.7%, sixth 20.9%, seventh 21.3%, eighth 21.4% and ninth decile 21.6%.

The highest overall CPI (using the Iranian year to March 2017 as the base year) stood at 156.5 for the second decile and the lowest index was registered at 155.1 for the first decile, Financial Tribune reported.

The year-on-year inflation rates increased by 39.1% for the first decile during the month under review, 40.4% for second, 40.5% for third, 40.3% for fourth, 40.2% for fifth, 40% for sixth, 40.6% for seventh, eighth and ninth and 41.4% for 10th decile.

Income deciles are groupings that result from ranking either all households or all persons in the population in the ascending order based on income and then dividing the population into 10 groups, each comprising approximately 10% of the estimated population.

Irrespective of income deciles, SCI reported recently that the goods and services Consumer Price Index registered a year-on-year increase of 39.6% in Dey compared with the similar month of last year.

SCI had put YOY inflation for the preceding month, Azar, which ended on December 21, at 37.4%.

The overall CPI (using the Iranian year to March 2017 as the base year) stood at 154.7 in Dey, indicating a 2% rise compared with the previous month.

The month-on-month inflation rate was 2.6% for the preceding month.

The average index in the 12-month period ending Jan. 20 increased by 20.6% compared with last year’s corresponding period.

SCI had put the average 12-month inflation rate for the preceding month of Azar at 18%.

The index registered a year-on-year increase of 39% for urban areas and 42.7% for rural areas compared with the similar month of last year.

SCI put the average 12-month inflation for urban and rural areas in Dey at 20.6% and 20.9% respectively.

The overall CPI reached 154.1 for urban households and 158.4 for rural households, indicating an increase of 2% for both urban and rural areas compared with the previous month.

Q3 Services PPI Up 8.8%

Another newly-published SCI report shows the overall Producer Price Index for the services sector (using 2011 as the base year) stood at 310.1 in the third quarter of the current Iranian year (Sept. 23-Dec. 21), indicating an 8.8% increase compared with the preceding quarter.

The services PPI is calculated by taking into account the indexes of eight subsectors, namely “repairing motor vehicles, motorcycles and home devices”, “hotels and restaurants”, “transportation, storage services and communications”, “brokerage (insurance) services”, “real estate, leasing and business”, “education”, “health services and social work”, and “other public, social and personal services”.

PPI for the subsector of “repairing motor vehicles, motorcycles and home devices” stood at 379.3, indicating a 13.3% rise compared with the previous quarter, according to data reported by the Statistical Center of Iran.

“Hotels and restaurants” registered a PPI of 429.8, posting a 15.3% rise compared with the previous quarter.

PPI for “Transportation, warehousing services and communications” stood at 368.2, registering a 9% increase over the previous quarter.

“Brokerage financial services (insurance)” hit a PPI of 298.4, indicating a 1.8% rise compared with the previous quarter.

That of “Real estate, leasing and business” stood at 228, registering a 5.9% rise over previous season.

PPI for “Education” stood at 305.5, posting a 15% rise compared with the previous quarter, while it registered 440.7 for “health services and social work”, indicating a 6% rise over the previous quarter.