It is not easy to get a reliable figure for inflation in Iran. Two official sources are tasked with this issue and they have continuously produced confusing statistics. Based on the latest statistics of the Central Bank of Iran (CBI), the annual inflation for the period ending on March 20, 2013, was 32.3%, whereas the Statistical Center of Iran (SCI) puts the figure at 28.8%. Independent economists believe inflation to be closer to 40%, citing distortions through remaining subsidies and the existence of a multi-tiered exchange-rate system. Another phenomenon that adds further complexity to calculating inflation is the fact that over the past few years, Iranian officials have redefined the base basket of goods in order to manipulate the inflation calculations to their own benefit. Furthermore, in a recent shift, the SCI changed the base year for the calculation of the consumer price index (CPI), another maneuver to push the official inflation numbers down.
No matter how we calculate the actual inflation, there is agreement that the past Iranian year was the worst in terms of inflation since the mid-1990s, when an external debt crisis along with the then-administration’s economic restructuring policies pushed inflation to some 48%. It is a fact that misguided government and CBI policies, especially the unprecedented growth in money supply, have led to inflationary pressures. Nonetheless, it is unclear how high inflation really is and what socio-political consequences it will have in Iran. However, what can be said categorically, as will be shown below, is that Iran is not experiencing hyperinflation, which is defined as “a rapid, uncontrolled surge in the price level."
