Deflationary pressures succeeded to end 2015 with a decline in consumer prices by 3.75% compared to an inflation of 1.86% in 2014, according to data released by the Central Administration of Statistics (CAS). The slump in commodity prices during 2015, the depreciation of the euro, and the economic slowdown were the major factors behind the decline in prices last year.
In December alone, consumer prices in Lebanon fell by 3.40% y-o-y as the Consumer Price Index (CPI) declined from 99.29 in December 2014 to 95.92 in December 2015. Despite that the prices of food and non-alcoholic beverages (20.6% of the CPI) barely changed, December’s deflation was mainly the result of lower energy prices. In fact, the price of Brent crude oil slashed by a yearly 44.85% from $54.18 per barrel in December 2014 to $36.56 per barrel in December 2015. This was reflected by the 7.66% y-o-y slump in the prices of transportation, a component with a weight of 13.1% in the index.
With cheaper oil, the price of water, electricity gas and other fuels (11.9% weight of CPI) also declined by 17.57% in December 2015. In addition, health prices constituting 7.8% of the CPI, downturned by 7.19% yearly. Food and non-alcoholic beverages, which represented 20.6% of the CPI, declined by a yearly 0.64%.
In contrast, education prices, with a weight of 5.9% in the CPI, rose by a yearly 1.52%, while the prices of clothing and footwear, with a weight of 5.4% in the CPI, increased by 0.24%.
Yearly Changes in the CPI in 2015
Source: CAS