Iran International
A month-long banking outage helped Iran’s Central Bank claim inflation had nearly halved, even as prices stood 84 percent higher than a year earlier and food costs continued to rise sharply.
In late July, the governor of Iran's central bank, Abdolnaser Hemmati, announced a victory: monthly inflation, he said, had been nearly halved in a single month — from 7.4 percent in the month ending June 21 to 3.6 percent in the month ending July 22 — thanks to “measures and tools at the bank’s disposal.” He did not name a single tool.
Numbers like these need translation. Monthly inflation is a standard statistic everywhere, but in Iran it is the number people live by: when prices move this fast, the month-to-month change is what a household actually feels at the store.
By the central bank’s own report, prices are now about 84 percent higher than a year ago. Even the “victory” month is nothing to celebrate: 3.6 percent, repeated for 12 months, compounds to an annual rate above 50 percent.
What the announcement omitted is that for almost exactly that statistical month, Iranians could not use their banks.
On June 13, electronic services failed at four major state banks. The state-linked company that runs their infrastructure claimed a cyberattack and said it had taken backup systems offline as a precaution, while official promises of a fix kept slipping.
On June 23, a second wave hit eight banks. Card readers went dead and banking apps would not load in a country where everyday life runs on debit cards, leaving millions of people unable to reach their own money for weeks.
Bank Melli, one of Iran’s largest banks, later waived late-payment penalties for a precisely defined window: June 13 to July 14. That amounted to a full month of disruption, by the bank’s own admission.
The same month piled on more. The state semi-shut the country for about a week in early July for Ali Khamenei’s funeral ceremonies. In the second week of July, fighting with the United States resumed and the naval blockade of Iran’s ports returned.
Extreme heat and a failing power grid then closed offices and banks in several provinces in the final week. In a month like that, a great many purchases simply never happened — not because prices had calmed, but because buying was impossible. A purchase that cannot happen puts no pressure on prices.
The central bank’s own report records the tell. Food inflation — groceries, the most card-dependent of all purchases — collapsed from 8.7 percent to 1.8 percent.
The dials the governor did not mention moved the other way: prices versus a year earlier accelerated, and the 12-month average rose from 57.7 to 61.4 percent.
Street prices told the same story. The announced consumer price of a carton of eggs rose about 20 percent between late May and mid-July, roughly double the official inflation rate for the same stretch.
Halving an inflation rate ordinarily requires tight money sustained over a long period. In Iran’s case, no tightening of any kind occurred: deposit rates did not move until late July, liquidity kept growing rapidly, and there was no sign of fiscal restraint.
A central bank that possessed a painless one-month cure would also need to explain why it kept that cure in the drawer while annual inflation has averaged above 40 percent over the past five years.
There is an old warning in economics, associated with the British economist Charles Goodhart, that when a measure becomes a target, it ceases to be a good measure. Iran’s monthly inflation rate has now completed that journey.
In July, it stopped measuring price pressure in the Iranian economy and began measuring something else: the downtime of the country’s payment system.
A government can manage inflation, or it can manage the inflation statistic. Only one of these shows up at the grocery store.
The report described the trend as the emergence of a "survival economy," in which even the smallest household possessions have become tradable assets as families struggle with soaring inflation and shrinking purchasing power.
Online classified advertisements, according to ILNA, increasingly feature offers to sell used work shoes and clothing, empty perfume bottles and natural hair for extensions, alongside listings advertising the rental of property deeds, salary slips and other financial guarantees.
From laptops to perfume bottles
The agency also highlighted growing demand for laptop rentals, with users seeking temporary access to devices for basic tasks such as typing documents, using Microsoft Office software or attending online classes.
"What may initially appear strange or even humorous actually reflects declining purchasing power, changing consumption patterns and households' efforts to generate cash," ILNA wrote.
The shift, The report said, illustrates how ownership is increasingly giving way to renting, while everyday items are being used until the very end of their economic value.
The findings come as inflation continues to weigh on Iranian households. According to the Statistical Center of Iran, annual inflation reached 66% in the Iranian month ending in late July, while year-on-year inflation stood at 87.9%.
A 'survival economy'
The growing number of advertisements, the report said, reflects a broader transformation in household finances, where assets once considered worthless or purely personal are increasingly being converted into immediate sources of income.
The agency said many sellers now bundle together low-value household items to improve their chances of making a sale, while advertisements offering natural hair have also become more common, with prices ranging from negotiable sums to several million rials depending on length, color and quality.
The report follows other recent signs of mounting financial pressure, including the spread of installment payments for healthcare and pharmaceuticals, as many Iranian families struggle to cover everyday expenses.
The expansion of the market for second-hand goods, rentals and personal assets, ILNA said, reflects a growing effort by households to generate cash in an economy where almost anything can become a source of income.
