Iran’s inflation crisis deepened in the second month of the current Iranian year, as newly released data from the Central Bank of Iran (CBI) showed one of the sharpest price surges recorded in decades. The figures for Ordibehesht 1405 (April 21–May 21, 2026) reveal that inflationary pressures have intensified across the economy, driven by currency depreciation, supply disruptions, damage to productive infrastructure, heightened inflation expectations and concerns over rapid liquidity growth.
According to the CBI, point-to-point inflation reached 77.2% in Ordibehesht 1405, up 10.2 percentage points from the previous month. Point-to-point inflation measures changes in consumer prices compared with the same month a year earlier and is widely regarded as one of the most important indicators of inflation momentum. The latest figure means that Iranian households paid, on average, more than 77% more for the same basket of goods and services than they did a year ago.
The increase represents one of the largest monthly jumps in inflation in recent years. More importantly, it marks the second consecutive month in which the Central Bank’s point-to-point inflation rate has reached a new post-World War II record. The data suggest that Iran has entered one of the most severe inflationary episodes in its modern economic history.
The latest figures also highlight the persistence of inflation in Iran. The country has now experienced point-to-point inflation above 30% for seven consecutive years, an exceptionally long period by international standards. Economists warn that such prolonged inflation tends to become self-reinforcing, as households and businesses increasingly make decisions based on expectations of future price increases.
Troubling Picture
Monthly inflation data paint an equally troubling picture. The CBI reported that monthly inflation reached 8.5% in Ordibehesht, the highest level since the removal of the 4,200-rial preferential exchange rate in Khordad 1401 (May 22–June 21, 2022). Monthly inflation measures changes in prices compared with the previous month and often provides a clearer indication of current economic trends.
An inflation rate of more than 8% in a single month signals extremely rapid price growth. If sustained for several months, such a pace can quickly translate into exceptionally high annual inflation rates and further undermine economic stability. The acceleration suggests that inflationary pressures are no longer limited to specific sectors but are spreading more broadly across the economy.
The Statistical Center of Iran (SCI) released its own inflation report, and its estimates were even higher. According to the SCI, monthly inflation reached 8.8% in Ordibehesht, while point-to-point inflation climbed to 83.4%.
Food prices remain a major source of concern. The SCI reported that point-to-point inflation for food and beverages reached 129.8%, indicating that the cost of providing basic food items has more than doubled compared with the same period last year. Since food accounts for a significant share of household spending—particularly among lower-income groups—the increase is placing substantial pressure on living standards.
Among individual food products, eggs recorded the largest monthly increase, rising 45.2% compared with Farvardin 1405 (March 21–April 20, 2026). Chicken meat followed with a 25% monthly increase. The sharp rise in these widely consumed products helps explain why many households perceive inflation to be even more severe than official aggregate indicators suggest.
Striking Development
One of the most striking developments in the latest report is the widening gap between goods inflation and services inflation. Since the beginning of 1404 (March 2025–March 2026), the divergence has steadily increased, reaching unprecedented levels in recent months.
According to the Central Bank, point-to-point inflation for goods reached 113.8% in Ordibehesht, making it the first time goods inflation has entered triple-digit territory. By comparison, services inflation stood at 42.5%. The resulting gap of 71.3 percentage points underscores how inflationary pressures have become concentrated in physical goods.
This distinction matters because consumers encounter goods prices more frequently than service prices in their daily lives. Food, clothing, household products and personal care items are purchased regularly, making their price increases highly visible. As a result, triple-digit goods inflation has a disproportionate impact on public perceptions of economic conditions.
Sectoral data further illustrate the breadth of the inflation surge. Healthcare recorded the highest monthly inflation rate at 23.8%, followed by household furnishings and equipment at 20.3%. Transportation ranked third, with monthly inflation reaching 19.4%.
The rise in healthcare costs is particularly concerning because it directly affects household welfare and access to essential services. Meanwhile, higher transportation and household equipment costs are adding further strain to family budgets already weakened by years of inflation.
Underlying Factors
Several factors appear to be driving the latest inflation wave. Economists point to disruptions in maritime trade routes and shipping activities that have increased import costs and complicated the supply of raw materials, intermediate goods and finished products. Damage to parts of Iran’s productive infrastructure has also reduced supply capacity in some sectors, creating additional upward pressure on prices.
Inflation expectations represent another important factor. In economies with a long history of high inflation, expectations often become a key driver of actual price movements. When consumers anticipate higher prices, they tend to accelerate purchases. Businesses, meanwhile, raise prices in anticipation of future cost increases. Such behavior can create a self-fulfilling inflationary cycle.
Concerns about liquidity growth have also intensified. Although monetary expansion typically affects prices with a lag, economists believe that increased government spending and pressure on public finances may eventually translate into faster money supply growth. If budget deficits continue to be financed through monetary channels, inflationary pressures could persist in the coming months.
Looking ahead, economists argue that sustainable inflation control will require addressing deeper structural challenges. Limiting liquidity growth, reducing budget deficits and lowering political and economic uncertainty are widely viewed as essential steps. Without reforms in these areas, temporary stabilization measures are unlikely to produce lasting results.
For now, the latest figures indicate that inflation remains the dominant challenge facing Iran’s economy. With goods inflation above 100%, food prices continuing to rise rapidly and inflation expectations becoming increasingly entrenched, policymakers face mounting pressure to restore stability before the current surge inflicts even greater damage on household purchasing power and long-term economic prospects.
