According to the Central Administration of Statistics (CAS), the consumer price index (CPI) remained on its deflationary trend, dropping from 100.78 in September 2014 to 96.07 (lowest level this year) in September of this year, registering a 4.67% year-on-year (y-o-y) and 3.24% year-to-date (y-t-d) deflation.
This deflationary pressure was mainly attributed to four factors, the first of which is the overall economic slowdown. The second culprit is the approximate 45% y-o-y tumble in international oil prices by September 2015. The third factor is the average 15% depreciation of the Euro vs the US dollar, over the same period, considering that the major part of Lebanon’s imports are from Europe. Finally, the fall in health prices since September 2014, following the Ministry of Health setting quotas on medicine prices, cutting them by up to 30% as of April 2014, has held back prices as well. To note then, “water, electricity, gas & other fuels”, “transportation” and “health” constitute three of the major weights in the CPI, with a cumulative share of 33%.
In terms of the CPI’s components, “food and non-alcoholic beverages” (20.6% of CPI) decreased by 0.87% y-o-y by September 2015. Moreover, Transportation (13.1% of CPI) and “water, electricity, gas & other fuels” (11.9% of CPI), witnessed a yearly fall of 12.80% and 21.41%, respectively. Three more sub-indices that respectively waned were “health” (7.8% of CPI), clothing and footwear (5.4% of CPI), and “communication” (4.6% of CPI), recording a 6.51%, 3.42% and 0.54% y-o-y declines over the same period. The final sub-index that fell yearly was “recreation, amusement and culture” (2.3% of CPI), which down ticked by 0.23% by September.
However, “education” sub-index, constituting 5.9% of the CPI, augmented by 4.52% y-o-y by September 2015. In addition, “actual rent” sub-index for households (old and new rent), with a stake of 3.4% in the CPI, and “alcohol beverages & tobacco” (1.6% of CPI) augmented by an annual 10.09% and 5.03%, respectively, over the above mentioned period.
Yearly CPI Components Change in August
Source: CAS