Iranian families’ food basket shrinks further

Analysis by PMOI/MEK

Iran, July 1, 2019 – Increasing inflation in Iran’s dysfunctional economy and skyrocketing food prices have left major parts of the population without much purchasing power and the amount of food that Iranian families can afford is on a continuous decline.

According to Iran’s Center for Statistics, the costs for an Iranian family during the current Persian calendar year is 50 percent higher than the year before. Meanwhile, wage increases are almost insignificant compared to the inflation rate.

The state-run newspaper Arman published an article in May writing: “Studying the numbers published by the website for the National Center for Statistics shows that a family’s costs for buying the same goods and services are 50 percent more than in May last year. The increasing rate of inflation has deteriorated under the impact of currency fluctuations which result in a decrease in the family’s purchasing power.”

“The Center for Statistics’ report about inflation until May shows that costs for the food and beverages group have decreased 0.2 percent compared to April. However, these numbers have increased 74.1 percent compared to May of last year,” the newspaper further wrote.

The following is a table from the state-run "90Eghtesadi" website that specializes in economic news. The table compares food prices between April 2018 and April 2019:

While food and beverage costs have increased north of 70 percent over the past year and cost at least 50 percent more than a year ago to raise a normal family, wages for the Persian year 2019-2020 haven’t increased more than 20 percent.

According to the Jahanesanat newspaper, state-published numbers show that a family of four which earns the minimum wage, lack the 22.5 million rials in its monthly budget.

However, the fact is that numbers published by the Islamic Republic are not reliable at all.  Analysts believe the poverty line for a four-member family is north of 60 million rials per month, which puts many working families with a monthly budget deficit of more than 40 million rials.

The Resalat newspaper wrote on June 19: “In the Persian year 2017-2018, about 16 percent of the country’s population lived under the extreme poverty line. Until the end of the Persian year 2018-2019, about 23 to 40 percent (based on different scenarios for the family’s income in the Persian year 2018-2019) will slip under the poverty line and the costs for providing basic living standards will increase dramatically.”

Jahanesanat published an article on June 16 titled, “The hell of recession,” writing about the impact of poverty and the lack of purchasing power: “Since the people’s purchasing power has decreased, factory sales will also follow the downward path. This is the reason behind the fall of manufacturing in the Persian year 2019-2020.”

Blaming Iranian officials for the inflation, Jahanesanat, close to the faction of Iranian regime President Hassan Rouhani, writes: “The price shocks in the market, which are undoubtedly run by the government itself, are not limited to price increases for one or two consumer goods or food items. Today, when you look at each and every item, you will see that their prices have increased compared to the similar period last year. From housing costs and rents to the costs of fruits, vegetables, meat, and everything that is called basic goods. However, government officials do not take any action in response to these catastrophic price increases.”