Recreation Added to Iranians' Wish List | Rich-Poor Gap Rises by 10%

Inflation does not hit everyone equally; a single rate can mean very different things for different households. When prices rise and the economy faces successive inflation, the share of essential expenses in household budgets determines who is pressured first and most severely.

Economic Group - Mehdi Safai: September inflation can be summed up as 89.8 percent; But the same number, if read without looking at its components, hides an important part of the story.

What is more important in this figure is the difference in the rate of price increase in different parts of the household portfolio. Because the increase in prices in September has been fueled by the non-food sector and services rather than food.

Meanwhile, if we look at the interval of one year instead of one month, the picture is almost the opposite. Point-to-point inflation of food, beverages and tobacco was 121.8% in September, while this rate for non-food goods and services was recorded at 71.9%. That is, the accumulated pressure in the food basket is much heavier, but the acceleration of the price increase in September has been seen noticeably in the non-food and service sectors.

A number that hides the real inflation of goods; Why didn't inflation reach three digits?

One of the details that is less paid attention to when reading inflation is the effect of "rent" on the general index. The weight of rent in the consumer index portfolio is 33.6%, and its point-to-point inflation was 32.8% in September; A figure that is far from point-to-point inflation of goods.

This same difference causes when we see all the consumer portfolio at once, the number of 73.6% for annual inflation is obtained; But when rent is excluded from the calculation, annual inflation rises to 92.6 percent, and point-to-point inflation rises from 89.8 percent to 114.1 percent.

This difference shows that rent still has a large share of the household portfolio. The point here is that the rate of rent increase at this point is lower than the rate of increase of many goods and if the rent index showed a desire to increase like in the past, we would have seen official three-digit inflation.

Durable goods are ahead

In September, durable goods were one of the most diverse parts of the price basket. The monthly inflation of this group was recorded at 13.3%; That means more than three times the monthly inflation of the whole country. Point-to-point inflation of durable goods also reached 148.1%.

In the same month, the monthly inflation of healthcare was 5.2%, furniture and home appliances 6%, clothing and shoes 6.3%, education 6.3%, transportation 7.9%, entertainment and culture 9.6%, and communication 14.7%; Therefore, the price increase in Shahrivar was not only limited to the daily purchase of food, and parts of the household's non-food expenses also increased at a high speed.

In this way, not only people's livelihood is affected by the sudden increase in prices. Now entertainment is reserved for the affluent, and many people in the society do not have the ability to take care of their souls in addition to their bodies. Inflation of almost 10% in entertainment and culture in just one month shows the beginning of the high price of this part of people's consumption.

Why is inflation not the same for decimals?

The number of 89.8% for point-to-point inflation is the average of the entire country; But households do not buy with the same basket. The data of Shahrivar clearly shows this difference.

Point-to-point inflation varies from 88.8% for the tenth decile to 98.3% for the first decile, and the inflation gap between the deciles is approximately 10 percentage points.

The important reason for this difference can be seen in the weight of foods in the basket of tithes. The share of foods, beverages and tobacco in the basket of the first decile is 42.4%, while this share is 21.6% for the tenth decile; Therefore, a single inflation rate cannot explain the price pressure imposed on all households in the same way. When the food sector has more than 121% inflation behind its products, clearly the weaker deciles of the society feel the inflation more than others.

Shahrivar; A month where the path of inflation is more important than the number itself

If we only see the number 89.8%, we get a picture of a very high level of inflation; But the details of Shahrivar say something more. Food spot inflation is much higher than headline inflation, while the monthly increase in non-food goods and services has been more than double that of food. Durable goods, communication and transportation have also recorded significant increases in this month.

On the other hand, the difference between the inflation of goods and rent has made the total inflation not fully reflect the intensity of the increase in the price of goods.

In this way, the story of Shahrivar inflation is not just the story of a record or a big number. Within this number, there are several different inflations: food inflation that has had a big jump in a year, durable goods inflation that has accelerated in a month, service inflation that has increased in parts of daily expenses, and inflation that has increased in intensity for different deciles depending on the composition of the household portfolio.