Amid public protests over living conditions and the soaring exchange rate, Iran’s Central Bank reported that the annual inflation rate in December reached its lowest level in four years.
The Central Bank, which has long ceased regular publication of inflation data, released a chart indicating that consumer inflation is at its lowest since fall 2020.
The Central Bank likely issued this report to convey that inflation is under control and the burden of high prices on citizens has lessened. However, the reality is different.
Regardless of whether the inflation rate is 20% or 60%, if people’s incomes do not increase proportionately, their purchasing power declines. This has been the case in recent years for many groups, including retirees.
In reality, an inflation rate of 36.3% is high even by the standards of the past 35 years in Iran. According to the Central Bank’s own data, between 1990 and 2019, inflation exceeded this rate in only one year out of 30.
Furthermore, the Statistical Center of Iran, designated as the official source for inflation figures, reported an annual inflation rate of 32.5% in December. Thus, according to the Central Bank’s narrative, inflation is even higher than the official rate.
It should be noted that these are official statistics from the Iranian regime, which are significantly removed from the realities of Iran’s economy.
Official Inflation vs. Perceived Inflation
Each organization calculates inflation by selecting a set of goods and services representing the average consumption basket of all households—in the Central Bank’s case, urban households. Changes in the prices of these items are analyzed to determine the inflation rate. However, this basket often differs significantly from the consumption patterns of most households.
For example, about one-third of this basket comprises housing rent. If you are not a renter, the composition of this reference inflation basket does not align with your living expenses.
On the other hand, if you are a renter and spend more than half of your income on rent, and your rent has doubled compared to last year, the inflation rate you feel differs significantly from the reference rate.
Income levels also affect each household’s inflation rate. For instance, bread constitutes a significant portion of the expenses of low-income households. Therefore, when bread prices rise, it impacts their cost of living and perceived inflation rate more intensely than it does for higher-income households.
The selective, irregular, unofficial, and delayed release of economic statistics, coupled with the omission of details, has called into question the Central Bank’s position as a supposedly independent authority from the government.
For example, the inflation data was only published as a chart on the bank’s website, with no detailed figures for previous months. The Central Bank has generally stopped providing such details since early 2023.
Additionally, the release of “unfavorable” statistics is sometimes delayed to the point that they become outdated and lose their news value.
One example is household income and expenditure reports, which were typically released each summer until 2017.
However, after 2017, these reports were not released for several years. Then, a few months ago, reports for 2018 to 2022 were abruptly published together, but many details on household income, expenses, and provincial breakdowns were omitted.
In a ludicrous statement, Mohammadreza Farzin, the governor of the Central Bank, dismissed regional developments and the Iranian regime’s inability to stabilize rates or improve livelihoods, attributing the rising dollar value to a U.S.-registered website.
