What Drove Inflation since 2011?

As the country struggles through the economic slowdown, the continuous political deadlocks  and the regional upheavals, we hear the term “inflation” getting tossed around. Looking beyond the common definition of “a rise in general prices”, inflation is one of the core drivers of investment decisions, consumption trends, unemployment levels etc…

Lebanon, one of the most expensive countries in the region and the world, undergoes international prices transmission for its high reliance on imports and its dollar-pegged currency. Noting that imports almost constituted 47% of its GDP in 2013, any international prices increase will certainly be imported into the local scene. In the same context, and given that the Lebanese economy is highly dollarized and have a fixed exchange rate to the dollar, any global increase in  the value of U.S. dollar against major currencies will directly imply a decrease in the prices of the Lebanese products. This was the case in 2014 when the U.S. dollar succeeded to progress amid positive economic indicators, lower unemployment rate decisions and the Federal Reserve’s decision to cut its Quantitative Easing…

Click below for the full report:

2014-11- What Drove Inflation since 2011

Leave a Reply

Your email address will not be published. Required fields are marked *