Iran’s domestic media quoted the Central Bank of Iran as stating that the inflation rate reached 58 percent at the end of August 2021, the highest rate since 1943.
Undoubtedly, one of the most important challenges of Iran’s economy in the past few decades has been inflation. This economic dilemma can affect the lives of all citizens of the country in general by affecting the development, economy, investment, employment, and income distribution, and even the political and social life of a country.
In the last three decades, the inflation rate in Iran has always been double-digit, and therefore economic planners have conducted many studies to control inflation, and the authorities have implemented a variety of policies in this regard, but the visible and prominent point in this regard is the failure of the programs and the uncontrollable inflation by the decision-makers in a way that the inflation rate never moved below the 10 percent.
In economics, there is a type of inflation, which occurs mostly in developing countries such as Iran due to the lack of appropriate economic infrastructure and the expansion of government sector activities in the economy, which is called structural inflation, i.e., due to the poor economic, political, governmental, and even cultural and social structures of this type of inflation, different problems are involved in creating and sustaining of this undesirable economic phenomenon.
Worse than the problem itself are the treatments that in such situations the government is implementing because inflation cannot be controlled by implementing monetary and fiscal policies.
One of the effects of this painful phenomenon is that to protect their interests against the increase in extreme and unforeseen prices, the people buy physical assets such as land, housing, and all kinds of currencies to sell at a higher price in the future, which is why these measures reduce the efficiency of the economy and create negative effects and ultimately, with the sustainability of these conditions, the amount of savings in the country declines, which also reduces investment in production activities, all of which will lead to lower economic capacity and slow economic growth.
The regime’s Central Bank has censored inflation figures since November 2018 in fear of the people’s reaction and a complete collapse of the economy.
“The latest macroeconomic indicators show that inflation in the 12 months ending August 2021 reached 58.3 percent and food and beverage inflation reached 72 percent. The 58 percent inflation rate in August this year is the highest since 1943. Thus, Rafsanjani’s inflation rate record is broken when it reached 51 percent in January 1996.” (Stater-run website Tahririeh, October 5, 2021)
Price rally of foods in the first six month
In a report, the Statistics Center of Iran published information on inflation of foodstuffs in September. Accordingly, the monthly inflation of foodstuffs reached 5 percent in the last month of summer, which was an increase compared to the monthly inflation of August.
In addition, point-to-point inflation of edible goods indicates that the index crosses the 60 percent border. In this report, of all the 53 edible items whose price changes have been reviewed, all of them have seen price increases compared to the same period last year, a unique coincidence that in recent months, despite the acceleration of price increases, we have not seen.
Among the foods surveyed, eight experienced growths of more than 100 percent and have doubled since last year. Also, the statistics in this report show that 42 edible items have registered growth above 42.9 percent point-to-point inflation in the country.