With 45.4%, Transportation Registers Highest Average Annual Inflation
EghtesadOnline: The average Consumer Price Index of the transportation sector in the 12-month period ending July 21, which marks the end of the fourth Iranian month, increased by 45.4% compared with the similar period of the year before.
The sector has registered the highest growth among 12 groups of the basket of consumer goods and services purchased by households.
With a coefficient of 9.41%, the CPI stood at 283.5 for the month under review, indicating a 7% increase compared with the month before—also the highest growth among the basket of consumer goods and services, the Statistical Center of Iran reported.
The transportation index registered a year-on-year increase of 55.9%.
The overall average goods and services Consumer Price Index in the 12-month period ending July 21 increased by 26.4% compared with the corresponding period of last year, latest data released by the Statistical Center of Iran show.
SCI had put the average annual inflation rate for the preceding Iranian month, which ended on June 20, at 27.8%.
The consumer inflation for the month under review (June 21-July 21) registered a year-on-year increase of 26.9% compared with the similar month of the previous Iranian year. The year-on-year inflation of the month ending June 20 was 22.5%.
The overall CPI (using the Iranian year to March 2017 as the base year) stood at 227.9 last month, indicating a 6.4% rise compared with the month before.
SCI put the average annual urban and rural inflation for the month under review at 26.4%.
CPI registered a year-on-year increase of 27% for urban areas and 25.9% for rural areas in the month ending July 21.
The overall CPI stood at 226.7 for urban households and 234.9 for rural households, indicating a month-on-month increase of 6.5% and 5.9% for urban and rural areas, respectively.
$344m in Losses Over Coronavirus
Iran’s transportation sector has sustained an estimated 80,000 billion rials ($344 million) in losses following the outbreak of the new coronavirus, says Mohsen Sadeqi, a senior official with the Ministry of Roads and Urban Development.
After tourism, transportation took the biggest hit from the pandemic, which makes it a priority to receive government aid, he added.
The government has approved a 750 trillion-rial ($3.22 billion) package to help low-income households and struggling businesses impacted by the rapidly spreading coronavirus. The loans will be given to small- and medium-sized enterprises hit hard by the pandemic, according to the website of the Central Bank of Iran.
Noting that rail companies and airlines mostly take out loans in foreign currency instead of the rial, the senior official said, “In addition to corona relief measures like granting cheap loans, tax and premium relief, the extension of repayment schedule of foreign currency loans is the newest proposal we came up with to support rail companies and airlines.”
“The lending rate for the government aid package will be 12% to be repaid within two years,” Abdolnasser Hemmati, the CBI governor, said.
Commenting on the interest rate, Hemmati said it is reasonable given the high inflation rate in the country.
“Even if banks set 18% interest on loans, the real interest rate would still be negative when compared to annual inflation … Any rate below 12% would apparently impose further financial strain on banks,” he said. Hemmati said only businesses that did not lay off workers during the corona crisis would be eligible for the loans. He instructed banks to process the loans soon and cut red tape.
According to Saeed Rasouli, the head of the Islamic Republic of Iran Railways, the government is offering a total of 9.4 trillion rials ($40.43 million) worth of low interest loans (12%) to rail passenger transportation companies to help them back on their feet after they suffered losses due to the outbreak of the novel coronavirus.
“The loans have been made available from June 8 and 63 companies have been found eligible to receive them,” Saeed Rasouli was quoted as saying by IRNA.
Presently, all coronavirus related protocols as well as social distancing are being followed and trains are running as per the timetables.