Every month for decades Iran’s statistics authorities have published the country’s latest inflation data. But for the past two months they have kept the figures under wraps — fuelling accusations that the regime is concealing evidence that prices are spiralling to record levels.
The most recent figure published by the Statistical Centre of Iran put annual inflation at 47.7 per cent for the year to the end of the Iranian month of Bahman, which falls in late February. Analysts told the Financial Times that the following month, inflation possibly surpassed the 49 per cent rate reached in 1995, the highest on record.
“It seems the Statistical Centre of Iran was not allowed by higher authorities to publish the inflation rate to avoid admitting that this government has broken the country’s record,” said Saeed Laylaz, a political economy analyst. “The fact is that the government has not been able to curb inflation.”
The statistics authority has said the figures have simply been delayed because it is changing the base year from which the data is calculated, from seven years ago to two. But analysts noted it would be unusual to apply such a change before the year had ended. “It’s just not right to use the new base year in the last month of the year,” said one Iranian economic analyst.
Reformist daily newspaper Etemad said last week the regime was “seeking to play with figures to decrease the inflation rate”.
Iran’s hardline government, led by President Ebrahim Raisi, is under mounting domestic pressure to deliver on its economic promises — notably to contain prices that have soared as US sanctions imposed over the country’s nuclear ambitions have strangled the economy.
Inflation was about 45 per cent when Raisi took power in 2021, but the president insisted Tehran could boost the economy without the revival of the 2015 nuclear agreement with world powers and the lifting of the sanctions.
However, millions of Iranians have since slipped further into hardship. The rial has lost more than a third of its value this year, while prices continue to soar, fuelling public wrath and sparking sporadic protests. Private-sector shopkeepers say the cost of chicken has increased by about 30 per cent in the past month, although prices are lower in state-run stores. The price of the cheapest domestically produced car, the Pride model, has risen more than 20 per cent since February.
“Over the past year, we have only managed to survive,” said a businesswoman who sells construction materials. “The business atmosphere is so gloomy that anyone who has merely survived is considered very successful. It’s depressing.”
The government is so concerned that a cost of living crisis could stoke dissent that this year it shut down the reformist Sazandegi newspaper for more than a week after it reported the rise in lamb prices ahead of Nowruz, the Iranian new year, in March.
Amid mounting dissatisfaction with the government, Raisi last month reshuffled his cabinet, replacing the vice-president for budget affairs and minister of agriculture. The education minister was also ousted following the failure to pay teachers’ salaries on time ahead of the new year. The minister of labour and central bank governor were replaced last year.
Worries over the economy have sparked political infighting, with some members of parliament threatening to impeach ministers. The industry minister, who they blame for rising car prices, was impeached on Sunday.
Mohsen Mehralizadeh, a reformist contender in the 2021 presidential election, wrote in a tweet last month that even if the whole cabinet were overhauled, nothing would change. “Production growth, curbing inflation and getting people out of this miserable situation have scientific solutions which you [Raisi] lack! . . . You are the one who should be replaced,” he wrote.
But Raisi’s position is unlikely to be threatened, say analysts. Iran’s supreme leader Ayatollah Ali Khamenei, who backs the president, last month called for unity, urging the government, parliament and judiciary to “be unanimous, co-operate and re-energise” each other.
Hardliners, who have taken over all levers of the Iranian state in recent years and are preparing for parliamentary elections next year, are anxious not to be seen presiding over the worst inflation rate in history. The record level of 1995 came under the centrist government of late president Akbar Hashemi Rafsanjani, whose advocacy of an open market approach hardliners see as the root cause of the current economic problems.
The crisis has left Tehran reluctant to embark on economic reforms, such as cutting energy subsidies, fearing they could fuel inflation and trigger fresh unrest. An increase in the price of petrol in 2019 led to widespread protests and cost hundreds of lives.
Public anger also remains high following months of turmoil last year over the death of a young woman, Mahsa Amini, in police custody after her arrest for failing to observe the Islamic dress code. Hundreds died in the clashes.
Meanwhile the economic outlook remains bleak. In a report last month, the University of Tehran-affiliated Institute for Development and Economic Research warned that the lack of any prospect of a nuclear agreement with the US and the absence of structural reforms would have “profound impacts” in the current financial year. Inflation and unemployment were likely to climb, economic growth would decline and the rial would depreciate further, it said.
For ordinary Iranians, the lack of inflation data is the least of their worries.
“We don’t need figures to realise how high inflation is,” said Maryam, a 49-year-old housewife. “I feel every day how fast my purchasing power is declining, which makes me extremely worried about my family’s future.”
Source: Economy - ft.com
