Iran’s annual inflation rose to 40.4% in the Persian calendar month ending November 22 (Aban), the Statistical Centre of Iran (SCI) said in its latest bulletin on November 27, marking a 1.5-point jump from October as price pressures flared across both food and non-food categories.

Despite efforts by the Pezeshkian administration to quell inflationary pressures, the current administration has found it challenging to cool prices across the board due to ongoing trade and banking restrictions imposed by the US and EU on the country. The administration has attempted to offset some aspects of inflationary pressures by keeping prices of petrol and bread historically low, but this has come under increasing pressure in recent months with the government partially relenting on imports of premium gasoline at higher prices. 

The renewed surge suggests Iran is drifting back into a stubborn inflationary loop after a short-lived autumn breather, with the consumer price index (CPI) reaching 417.5 points from 403.8 in October.

The acceleration shows that price-control measures rolled out by Tehran are struggling to rein in costs, particularly in low-income areas where households are shelling out far more for basic staples and services.

Year-on-year (point-to-point) inflation hit 49.4% nationwide, meaning families paid nearly half as much again for a standard basket of goods and services than a year earlier. Point-to-point inflation ticked up 0.8 points from October, indicating still-festering momentum.

Monthly inflation stood at 3.4%, up sharply in food, drink and tobacco, which jumped 4.7% in November. Non-food goods and services rose 2.6%. The data shows price rises were broad-based, with no meaningful relief across essential categories.

Fresh produce and perishables drove a large share of the monthly climb. Vegetables soared 7.8%, fruit and nuts 6.7%, and dairy 6.0%. Meat products gained 3.5%, while fish prices rose 5.0%. Among non-food items, household utilities climbed 6.9% and healthcare lifted 1.4%.

Housing, which carries the heaviest weighting in the CPI basket, recorded a 2.7% monthly rise in rents and property-related services, keeping overall inflation stubbornly elevated. Communications remained among the most subdued categories at 1.5%.

The inflation gap between income groups widened to 2.2 points, from 1.9 points in October. The poorest decile faced an annual rate of 41.7%, compared with 39.5% for the wealthiest households, according to SCI’s decile-level breakdown.

Rural regions remained under heavier strain than urban areas. Annual inflation in villages reached 42.6%, compared with 40.0% in cities. Monthly inflation also ran hotter in rural districts at 3.7%, against 3.4% in urban zones.

Regional disparities persisted, with inflation running hottest in the mountainous west and southwest, Chaharmahal and Bakhtiari at 56.0% and Lorestan at 54.4%, while Tehran Province, by contrast, logged a far milder 42.4%. Provinces in the mountainous west and southwest once again bore the brunt of food-price swings.

Despite forecasts from the IMF and others that inflation should gradually ease, a mix of sanctions, chronic rial depreciation, fiscal deficits, and policy missteps keeps eroding real wages, driving up the cost of basic goods, and deepening poverty, especially as food and housing inflation far outpaces headline rates and forces households to cut back on meat, healthcare, and other essentials.