Low Energy Prices Pull Consumer Price Index Down by 0.71% in December 2014

According to the Central Administration of Statistics December’s  inflation slid by 0.71% as the Consumer Price Index (CPI) fell from 100 points in December 2013 (which is the base year) to 99.29 points in December 2014.

Out of the 12 sub-indices, 4 declined and 8 posted yearly increases.

Water, electricity, gas and other fuels, which holds a weight of 11.9 in the CPI, posted an 8.92% yearly decline. This can be linked to the international slump in oil prices which was imprinted onto the Lebanese market. According to the Ministry of Energy and Water, the prices of oil have significantly dropped: The price of 20 liters of Octane 98 and Octane 95 fell by a yearly 34% each to LBP 22,300 and LBP 21,700 as at the 21st of January 2015. Likewise, Mazout and diesel oil prices plummeted by 44% each to LBP/20 liters 14,800 and 14,900, respectively.

The lower prices at the pump have also resulted in an 8.46% decline in the cost of transportation, which accounts for 13.1 in the CPI.

Communication expenditures, holding a weight of 4.6 in the CPI, dipped by a yearly 23.65%. As for health expenditures, they registered a negligible 0.03% decline in December 2014.

On the other hand, food and non-alcoholic beverages expenditures, with a weight of 20.6 in the CPI, rose by 1.29% in December 2014. The actual rent component, with a weight of 16.6, also posted a yearly increase of 4.25%.

On a monthly basis, the CPI posted a 1.22% decline from100.52 points, a drop that was also driven by lower expenditures of “water, electricity, gas and other fuels” and transportation. The fuel price index also shed a monthly 9.23% since all its components (at the exception of solid fuels) gas, liquid fuels, and, fuel and lubricants for personal transport equipment all declined by 2.99%, 11.17% and 10.25%, respectively.

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