Iran Cash Transfers in a Time of War and Inflation
Iran has used cash transfers effectively to reach vulnerable households and stave off hunger during some of its most difficult years in recent memory. The practice of depositing monthly cash transfers into household accounts originated with the Subsidy Reform Law of 2010, which authorized the government to use the savings from eliminating energy and bread subsidies to compensate households for the resulting increase in living costs.
(more…)Why Iran Has Avoided Hyperinflation—And Why That May Be Changing?
The inflation report for the Iranian month of Ordibehesht (21 April to 20 May) showed a significant rise in prices: 8.5 percent according to the Central Bank and 8.8 percent according to the Statistical Center of Iran. As the figure showing three-month averages indicates, these are record monthly inflation rates, equivalent to annual rates in excess of 150 percent. More importantly, they interrupt a three-month decline in inflation (at least according to the SCI data), which had raised hopes that the cost-push inflation resulting from last fall’s removal of foreign-exchange subsidies for food and medicine had largely been absorbed.
(more…)Food Prices Surge in a Year Marked by War on Iran
Last week, the Statistical Center of Iran published its inflation report for Esfand (ending March 20), the final month of the Iranian year 1404. Despite the record-high inflation reported for the year, its most noteworthy fact is its release amid heavy bombing by the United States and Israel. It is a reminder of the resilience of the Iranian spirit—not only on the battlefield, but also in maintaining the state’s core functions on schedule. Perhaps more damaging than the destruction of the country’s physical capital is the erosion of its institutions, of which the production of accurate statistics—even when politically inconvenient—is essential and far harder to rebuild.
(more…)Iran’s currency crisis: what the rial does (and does not) tell us
The recent nationwide protests in Iran are the result of an accumulation of grievances, increasingly focused on what is commonly described as the “loss of value of the national currency.” This phrase is a familiar everyday lament among Iranians, who often equate the value of the rial—measured in U.S. dollars—with living standards. In doing so, they typically focus on the free-market exchange rate. Although this is a narrow market, it produces the most dramatic signal. The bulk of foreign exchange transactions take place at lower rates, but access to them is limited. The free-market rate, now around 1.3 million rials per dollar and averaging just under one million in the past month (see the blue line in Figure 1, left axis), is roughly 100 times its level when Obama-era sanctions took effect in late 2011.
(more…)Rethinking CPI, Food Prices, and Living Standards in Iran
A comment from an informed reader prompted me to re-examine my earlier post on living standards in 2024/25. The issue raised was whether it is adequate—or even accurate—to deflate household expenditures with the overall CPI, as reported by the Statistical Center of Iran (SCI), while ignoring the fact that food prices have risen faster than average prices.
(more…)The US-Israel war on Iran revives inflation fears
Kudos to the Statistical Center of Iran for not missing last month’s inflation report (Khordad = 21 May-20 June), despite the destruction caused by the Israeli bombing of Tehran. The attack struck at the heart of Tehran, a few blocks from SCI’s main building. Significantly, for those who habitually question Iran’s official statistics, the report is not flattering.
(more…)Trump’s return shocks Iran’s currency and prices
With Trump’s return to power, Iran is bracing for another round of maximum pressure. The rial has already fallen by one-third in the unofficial free market since last November, when his victory was announced. As before, the sharp devaluation has quickly translated into higher prices and rising social tensions.
(more…)Good economic news fails to impress Iranians as they go to the polls
Two pieces of positive economic news were published last week, continued economic growth last fall and lower inflation for the Iranian month of Bahman that ended on February 20. You would think that days before the elections for the parliament and the Assembly of Experts on March 1, they would attract attention and scrutiny. But in Iran public opinion about the economy and elections have moved beyond facts and data. Public opinion because people dismiss official news about the economy as propaganda, and elections because, thanks to heavy vetting, only one side appears to have a chance of occupying the most seats in the two assemblies.
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Tyranny of numbers 
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