At the same time as the worsening economic situation in Iran, point-to-point inflation in December reached 52.6%, indicating an increase of 3.2% compared to November.
The Statistical Center of Iran, a state-run body under Iran’s regime, reported on Saturday, December 27, that the average annual inflation rate in December also reached 42.2%.
This figure reflects the average increase in the prices of goods and services over the 12 months ending in December compared to the same period the previous year, showing a 1.8% increase compared to November.
Iran’s ‘One-Time Exporters’ Failed to Return 93% Of Their Foreign Currency Export Revenues
The Consumer Price Index rose by 4.2% on a monthly basis, reaching 435.1 points. Inflationary pressure on lower-income deciles also remained higher than on higher-income deciles.
Point-to-point inflation in December was reported at 72% for the food, beverages, and tobacco group, and 43% for non-food goods and services.
At the end of December, the annual inflation rate was also 50% for the food, beverages, and tobacco group, and 38.3% for non-food goods and services.
Additionally, monthly inflation for milk, cheese, and eggs was reported at 10.2%, and monthly inflation in the bread sector at 7.7%.
The officially announced inflation rate, due to the weighting coefficients applied by the Statistical Center to consumption groups, is considered by many citizens and experts not to reflect market realities.
Moreover, the sampling used by this center to calculate inflation is based on reports of average commodity prices in the market, which themselves differ from reality.
The sharp increase in point-to-point inflation can be one of the early signs or precursors of hyperinflation, as it reflects an accelerating pace of price growth.
According to the standard definition, hyperinflation occurs when monthly inflation exceeds 50%, or in other words, when prices rise by more than 1% per day.
Under such conditions, if monthly inflation reaches 50% and persists, annual point-to-point inflation can rise to thousands of percent.
Runaway Price Increases and the Shadow of Hyperinflation Over Iran’s Economy
Accordingly, if the 50% monthly inflation recorded in December this year were to continue, the annual point-to-point inflation rate would reach around 13,000%.
Hossein Abdeh Tabrizi, an economist and former secretary general of the Tehran Stock Exchange, warned on December 23 that if 60% inflation is repeated next year and the budget does not remain within its announced framework, the country will enter a phase of dollarization.
According to him, at this stage inflation could suddenly jump from 60% to 3,000%.
In recent months, especially after the activation of the snapback mechanism and the return of United Nations sanctions, citizens have reported daily price increases, saying that even if they shop again after just a few days, they have to buy goods at higher prices.
Experts have warned that the continuation of the unprecedented rise in food and essential commodity prices in Iran could lead to serious consequences, including harm to public health, the spread of malnutrition, and intensified psychological pressure on society.
