The National Unrest since October Raised the Monthly Inflation Rate to 3.17% in November 2019

The onset of the civic protest across Lebanon on October 17th and the ensuing financial and economic repercussions, namely the imposition of capital controls, contributed to raising inflation further up starting Q4 2019. In fact, the country’s average monthly inflation rate more than doubled, going from October’s 1.33% to reach highs of 3.17% in November 2019, according to the Central Administration of Statistics (CAS).

In the first eleven months of 2019, Lebanon’s consumer price index (CPI) rose by an annual 2.52%, compared to an aggressive inflation rate of 6.26% recorded by November last year. Upticks were registered across the main components of the CPI, except for Transportation and Health.

In details, the average costs of “Housing and utilities”, inclusive of water, electricity, gas and other fuels (constituting 28.4% of CPI) increased by 1.43% year-on-year (YOY) by November 2019. In fact, “Owner-occupied” rental costs (composing 13.6% of Housing and utilities) added 2.26%YOY, while the average prices of “water, electricity, gas, and other fuels” (11.8% of Housing & utilities) recorded an incremental 0.13% uptick over the same period. Moreover, the average prices of “Food and non-alcoholic beverages” (20% of the CPI) and of “Education” (6.6% of CPI) respectively rose by 3.61%YOY and 4.91%YOY by November 2019. In turn, average prices of “Clothing and Footwear” (5.2% of CPI) surged by 13.86%YOY in the first eleven months of the year.

Nonetheless, average consumer prices of “Transportation” (13.1% of the CPI) slipped by an annual 0.87%, mainly on the back of a 12.1%YOY decline in international average oil prices to $64.1/barrel by Nov.2019. As for the average costs of “Health” (7.7% of the CPI), they retreated by 0.52%YOY by November 2019.

We expect average annual inflation rates to continue their increase into December 2019 and  Q1 2020, as capital controls imposed since Nov. 01st also triggered the emergence of a parallel market rendering the imports of businesses’ basic materials and finished products priced in foreign currency, much more costly. This will therefore be reflected on consumer costs as well.


The National Unrest since October Raised the Monthly Inflation Rate to 3.17% in November 2019



Source: CAS

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