According to the Central Administration of Statistics (CAS), average consumer prices in Lebanon went up by an annual 6% in the first half of 2018 compared to 4.42% in H1 2017. In fact, consumer prices went up across all sub-categories, which is most likely linked to the recent hike in taxes that went into effect in January 2018, with the most prominent one being the rise in the Value Added Tax (VAT) by 1percentage point to 11%.
In details, the average costs of “Housing and utilities”, including water, electricity, gas and other fuels, (28.4% of the CPI) and transportation (13.10% of the CPI) rose yearly by 6.13% and 7.65% respectively by June 2018. Both increases can be explained by a rise of 35% in oil prices to $71.16 per barrel over the same period.
The highest increases over the period were recorded in the average prices of “clothing and footwear” , accounting for 5.20% of the CPI that surged by yearly levels of 16.27%, .This could be explained by the yearly rise of 11% in euro/USD to 1.210 over the same period which led to an increase in the cost of imported goods in addition of the increase in transportation costs noted above.
In addition, the average prices for health (7.7% of the CPI) increased yearly by 6.68% which is partly due to the Euro/Dollar variation. The average prices for “Food and non-alcoholic beverages” (constituting 20% of the CPI) registered a yearly uptick of 4.47% by June 2018. Lastly, the average prices for “Education” (which accounted for 6.6% of the total CPI) rose by 4.05% year-on-year by June 2018
Average Inflation by June
Source: CAS