Consumption of poor families shrinks

Financial Tribune – The seven-month inflation rate calculated for households within three deciles at the bottom of income distribution did not exceed 3.9% in the Iranian years ending March 2017 and 2018

The food basket of the poorest 10% of the population just became smaller last year (March 2018-19).

The overall Consumer Price Index measured for Iranian households in the seven months ending Oct. 22 increased by 12.5%. The rise in inflation rate registered for low-income households, those who fall within three deciles at the bottom of income distribution, was slower than the average rate. For example, it was 10.7% for the first income decile and 11.8% for the third decile.

According to a report by the Persian economic daily Donya-e-Eqtesad, the seven-month inflation rate calculated for households within three deciles at the bottom of income distribution did not exceed 3.9% in the Iranian years ending March 2017 and 2018. However, the index jumped more than 30% in the last Iranian year that ended March 2019.

Such a surge in consumer prices is doubly difficult for low-income families, given their restricted market basket. Consequently, they have been forced to remove even essential items from their basket of goods and services.

Data released by the Statistical Center of Iran show households in the first income decile (those with the lowest income) spent 2.43 million rials ($21.7) on meat last year compared with 2.11 million rials ($18.9) in the year ending March 2018, suggesting that they spent more to buy meat last year. However, they consumed less meat.