An American Institute: Inflation in Iran has been at its highest in 26 years

In a moment in which Tehran continues to expand its nuclear program, the inflation rate shows to be at the top of the chronic crises of the Iranian economy, in the light of economic stagnation, reinforced by the influence of the pressures of the nuclear dossier, bringing effective inflation to the level higher in 26 years.

According to the Iranian Statistical Center, the average rate of inflation in Iran in August, with an annual comparison, was 45.2%. The figure was 44.5% for urban households and 48.7% for rural households.

Inflation in Iran has steadily increased 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 number as deflation dominated the global economy due to the massive slowdown associated with the pandemic.

However, in 2021, global deflation began to decline and inflation in Iran surpassed its level in 2019.

According to the report, inflation record derives in starts from the increase in the prices of imported Iranian goods. According to the Iranian Statistical Center, the import price index has increased by 505.9%; The index named in dollars it was in media 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 producers to produce goods.

The huge increase in the import price index is in partly due to the depreciation of the rial, as the price of the US dollar in Iran reached 161.4 million riyals on April 30, 2020.

A year later, the US dollar was traded for 232.5 million riyals, and on September 10, 2021, one US dollar was traded for 278.8 million riyals.

The producer price index (PPI) also increased and the producer price index increased by 73% in the spring of 2021. The annual rate of inflation of producer prices remained at 60.4% and the quarterly rate at 10.1%.

In addition to inflation, other economic indicators for Iran are sending mixed signals on the country’s economy. The labor market has improved slightly from last year as the initial COVID-19 shock faded.

In the spring of 2021, the number of workers in Iran has increased by about 400,000 since the spring of 2020, but the number of workers today is 1.5 million in less than in spring 2019.

The unemployment rate was 8.8% in the spring of 2021, but the job participation rate – reflecting people who have or are looking for a job – was only 41.4%.

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