Lebanon’s Inflation Rate Hit a Record-high of 56.5% in May 2020

The Central Administration of Statistics (CAS) revealed that Lebanon’s monthly inflation rate surged from 11.4% and 17.5% in Feb. and March 2020, respectively, to reach 46.6% in April and a record-high of 56.5% in May 2020.

Expectedly, amid the country’s ongoing turmoil and intensifying dollar crisis, Lebanon’s  inflation rate in the first five months climbed to 28.5%, up from lows of 3.6% registered by May last year. Accordingly, the sub-components of Lebanon’s consumer price index (CPI) all recorded increases over the studied period, but we observe substantial upticks in “non-basic” components, that is, in the needs and services that are considered “dispensable” during acute crises such as Tobacco and alcoholic beverages, Clothing and Household furnishings.

In fact, the average costs of “Housing and utilities”, inclusive of water, electricity, gas and other fuels (grasping 28.4% of the CPI) added a yearly 1.1% by May 2020, such that “Owner-occupied” rental costs (13.6% of Housing and utilities) rose by 4% year-on-year (YOY) while the average prices of “water, electricity, gas, and other fuels” (11.8% of Housing & utilities) decreased by 3.1%YOY. Moreover, average prices of “Food and non-alcoholic beverages” (20% of CPI) surged by 82% by May 2020. Food overall has become more expensive most probably due to the ongoing sharp depreciation in the Lebanese pound, the dollar shortage in the market and the absence of proper monitoring authorities on the market players’ pricing and profit margins.   

In turn, the average prices of “Transportation” (13.1% of the CPI), “Health” (7.7% of the CPI) and “Education” (6.6% of CPI) all recorded upticks across the board, increasing by an annual 24.5%, 2.5% and 4%, respectively, over the period. It is worth noting that Transportation costs continued to increase despite the 36.2% annual drop in the average of international oil prices which stood at $42.6/barrel by May 2020.

Notably, the average costs of “Clothing and Footwear” (5.2% of CPI) surged by a substantial 84.4%YOY by May 2020. Similarly, average prices of “Furnishings and household equipment” (3.8% of CPI) and “Alcoholic beverages and tobacco” (1.4% of CPI) increased by 66% and 97.3%, respectively, by May 2020.

It is worthy to note that the CAS disclosed in its latest statistics that many of the prices provided for March, April and May 2020 were missing, namely the following CPI components: Restaurant and hotels, Furnishings & household equipment, Clothing and footwear, as well as F&B. Therefore, the agency had to input its own figures to calculate the corresponding inflation rate for the period.

 Lebanon’s Inflation Rate Hit a Record-high of 56.5% in May 2020

Source: CAS

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