500-Toman Doping Against 121% Inflation!

The cost of a basket of 11 basic goods in mid-Mehr reaches about 4.1 million tomans per person, and the 1.5 million-toman credit covers only 36% of it.

According to ambassador Arjan; After months of keeping the credit of 1 million tomans Kalaberg, the government finally increased its amount by 50% for the first group of beneficiaries. However, the calculations of Ekhtezandnews show that the cost of preparing a basket of 11 items of basic goods in the middle of October for each person reaches about 4.1 million tomans, and even a credit of 1.5 million tomans only covers 36% of it; That too, in the situation that the spot inflation of food has exceeded 121% in September.

The increase of 500,000 tomans in the credit of the electronic goods list was finally implemented on Saturday, October 18, 1405 for a group of beneficiaries. According to the announcement of the Ministry of Cooperation, Labor and Social Welfare, in the first stage, the credit of Kalaberg has increased from one million tomans to one million and 500 thousand tomans.

This decision apparently means a 50% increase in the government's subsistence support for a group of low-income households; But examining it along with food inflation and the increase in the price of basic goods, presents a different picture of the real effect of this increase on the purchasing power of households.

From January 1404, when the credit of one million tomans of Kalaberg was implemented in the new version of the plan, until October 1405, the prices of items such as oil, rice, meat, dairy products and eggs have increased many times. While the amount of government support remained constant for consecutive months.

Now the question is, what share of the actual cost of buying basic goods will be compensated by the increase of 500 thousand tomans of goods? How much of the food basket can a person with a credit of 1.5 million tomans provide, and what is the difference between the credit of the government and the cost of buying these goods for a family of four?

To answer this question, Economic News has compared the values of the 11-item basket announced by the Ministry of Cooperation, Labor and Social Welfare with the prices observed in the market in the days leading to October 18.

The results show that although the new increase can cover a part of the subsistence pressure of the eligible households, the major part of the cost of providing essential goods remains outside the government's support credit. The calculations of Economy News are based on the values announced by the Ministry of Cooperation, Labor and Social Welfare and the reported prices of fruit and vegetable fields in Mehr 1405.

In the announcement of the Ministry of Welfare, the amount of chicken was one kilogram; In the main scenario of this report, two kilograms of chicken are considered. The price of milk is calculated by converting approximate weight to volume, and the price of eggs is calculated based on the approximate weight of 30 combs. The average of legumes was obtained from the rates of lentil, pinto bean and chickpea samples.

These calculations show that it costs about 4 million and 127 thousand tomans to prepare the examined basket for each person at mid-October prices.

It should also be noted that part of the rates used are related to fruit and vegetable fields; Centers that, according to market reports, offer some goods cheaper than city level stores. Therefore, the cost of buying the same amount of goods from other stores can be higher than the calculated figure.

buying rice and red meat; More than all the credit of Kalaberg

One of the notable points of the table is the high share of protein items and rice in the cost of the basket. Based on the rates reviewed, buying two kilograms of Iranian rice costs about 845 thousand tomans. On the other hand, the price of half a kilogram of frozen beef reaches 772 thousand 500 tomans.

In this way, the total cost of buying these two pens will be one million 617 thousand 500 tomans. This figure is more than the total credit of 1.5 million tomans of Kalaberg. While the cost of buying milk, cheese, yogurt, chicken, eggs, oil, beans, pasta and sugar has not been added.

In fact, even without taking into account all of a person's nutritional needs, the cost of providing some basic commodities can consume the entire government's support credit.

How much percent of the food basket does 1.5 million tomans Kalaberg cover?

By determining the cost of the basket, it is possible to calculate the coverage of the government's credit. In the main scenario of this report, the cost of preparing an 11-pencil basket for one person is estimated at 4,127,400 Tomans.

With the previous credit of 1 million Tomans, only 24.2% of the cost of this basket could be covered. If the credit is increased to 1.5 million Tomans, the share of government coverage will reach 36.3%.

In other words, the new increase in credit increases the share of the portfolio coverage by about 12.1 percentage points; But still nearly 64% of the cost of the examined goods remains outside the coverage of Kalaberg.

A person who receives a credit of 1.5 million tomans must spend another two million and 627 thousand tomans from his personal resources to buy all the amounts specified in the basket.

This ratio is also important for calculating household expenses; Because with the increase in the number of family members, both the total credit of the goods and the estimated cost of the basket will increase.

family of four; Six million tomans credit against the cost of 16.5 million tomans

If the same amounts of consumption are considered for four people, the cost of preparing a monthly basket for a family of four reaches about 16 million 510 thousand Tomans.

This is despite the fact that the family's previous credit was four million tomans, and if the credit of all members is increased to 1.5 million tomans, the total assets of the family will reach six million tomans.

Therefore, even with this increase, the family will need about 10,510,000 Tomans of other resources to provide the calculated amounts of basic goods. Ekhtezandnews calculations are based on table number one and the assumption of allocation of 1.5 million Tomans per person.

The important point is that the calculation of the cost of a family of four has been done assuming equal per capita consumption for all four members.

On the other hand, the cost of 16.5 million tomans is only related to 11 selected product groups. The cost of buying bread, fruit, vegetables and other food items outside the basket, as well as the cost of housing, transportation, treatment, education and other household expenses are not calculated in this figure.

credit remained stable; How much did the price of food go up?

To understand the effect of credit stability, we can compare the trend of rising food prices with the growth of government support.

While the amount of one million tomans of Kalaberg did not change from December 1404 to before the increase in October, the latest report of the Statistics Center shows that the prices of food, beverages and tobacco continued to face three-digit point-to-point inflation.

During this period, some commodity items such as oil, eggs and rice have experienced significant price increases, and the share of government credit from the cost of procurement of goods has decreased.

Of course, in order to accurately calculate the reduction in the purchasing power of goods from January to October, the cost of a completely identical basket must be calculated with fixed values and prices for both periods.

Therefore, a direct comparison of the 121.8% point inflation in Shahrivar with the 50% increase in Mehr credit does not alone indicate the exact extent of Kalaberg's backwardness; Because these two rates have different time period and composition.

But what is clear is the stability of credit in a period when the price level of essential goods has continuously increased.

As a result, part of the increase of 500,000 Tomans in October should be considered as a compensation for the decrease in purchasing power of the previous months, not necessarily a net increase in household purchasing power compared to the beginning of the plan implementation.

What happened to the promise of seasonal price compensation?

Another important point that should be considered in the evaluation of the Kalaberg policy is the provisions of the government regulations on ensuring food security and maintaining the purchasing power of households.

On January 10, 1404, the Board of Ministers approved the regulation "Ensuring food security and improving people's livelihood"; A regulation whose purpose is to transfer support to the final consumer and maintain the purchasing power of households.

According to Article 3 of this regulation, the increase in cost due to the change in the price of items in the goods basket must be evaluated quarterly and compensated from the sources of the backup account through credit increase.

Despite this, from the beginning of the implementation of the one million Toman credit until Mehr 1405, the general and proportional increase of this amount to compensate for the price change of merchandise items had not been implemented.

Now, the government has taken a step towards increasing support by increasing the credit of the first group of beneficiaries by 500 thousand tomans. But the main question is whether this decision will become a regular mechanism to adjust credit according to the price of basic commodities?