Iran’s industry sector registered an annualised producer inflation of 25.9% during the fifth month of the current Persian calendar year (July 22 – August 21), according to a report by the Statistical Centre of Iran (SCI) on September 15.

Producer inflation is determined by analysing the fluctuations in the Producer Price Index (PPI) over a period of time. Unlike the Consumer Price Index (CPI), which reflects changes in costs from the consumer's standpoint, the PPI monitors the price shifts of goods and services from the seller's perspective. This index is important for keeping track of production cost changes and is an invaluable resource for predicting inflation rates and assessing economic performance.

The sector’s Producer Price Index (PPI) stood at 1,241.8 during the month, showing a 0.6% month-on-month (m/m) increase and a 20.2% year-on-year (y/y) rise.

Among the over 20 sub-categories of the sector, the "production of motor vehicles, trailers and semi-trailers," "textile production," and "printing and reproduction of recorded media" groups recorded the lowest m/m producer inflation during the period, at 0.1% each, while the "production of food products" group registered the highest at 3%.

The “production of base metals” group recorded -0.8% m/m PPI during the month, while the “production of computer, electronic and lighting products” group registered a -0.4 % PPI.

The “production of fabricated metal products, except for machinery and equipment” and “production of coke and oil refining products” each registered a -0.1 % m/m PPI during the month.

When analysing y/y PPI inflation figures, the group "production of coke and petroleum refining products" had the lowest rate at 6.1%, while the group "production of leather and related products" had the highest rate at 33.9%.

The "production of paper and paper products" experienced the lowest increase in annualised PPI inflation rates at 14.1%, while the "production of unclassified machinery and equipment" recorded the highest increase at 47.6%.

The SCI also released producer inflation in three other major economic sectors, namely, mining, services, and electricity.

Mining

The mining sector’s overall PPI amounted to 2,186.7 in the month under review, marking a 2.6% m/m rise and a 21% y/y growth, with annualised inflation at 31.4%.

From the three subcategories of mining, the m/m PPI inflation of the “coal extraction” stood at 5.6% and that of the “extraction of metal ores” and “extraction of other mines” hit 2.7% and 1.3%, respectively.

The y/y producer inflation of “coal extraction” amounted to 23.1% and that of the “extraction of metal ores” and “extraction of other mines” were 18.8% and 36.6%, respectively.

The average annualised PPI inflation of “coal extraction” was 23.5% and that of “extraction of metal ores” and “extraction of other mines” were at 30.5% and 40.3% respectively.

Services

The overall PPI of the services sector stood at 1,194.1 in the month ending August 21, registering a 2% m/m growth and a 35.9% y/y increase, with the annualised rate at 44.7%.

From the 13 subcategories of the sector, “water networks, wastewater management and wastewater treatment” recorded the lowest m/m PPI rate with 0%, while “administrative activities and support services” registered the highest with 5.4%.

The “professional, scientific and technical activities” group had the lowest y/y PPI with 21.9%, while the “education” group registered the highest with 44.6%.

On the annualised PPI inflation rates, “information and communications” recorded the lowest rate with 22.3%, while “services related to accommodation and food” registered the highest with 59.3%.

There have been significant fluctuations in y/y producer inflation in the service sector from March 2019-20 to March 2024-25, according to an analysis by EcoIran.

Electricity

The electricity’s overall PPI hit 321.4, showing a 0.4% m/m increase and a 3.3% y/y fall, with the annualised rate at 21.6%.