In the midst of the country’s ongoing political and economic crisis and the intensifying depreciation of the Lebanese Pound’s value on the parallel market, Lebanon’s inflation rate in June 2020 stood at 89.74%, the highest monthly rate since the Central Administration of Statistics (CAS) began releasing this series in December 2008.
Looking at inflation in the first half (H1) of 2020, the rate stood at 38.79% compared to 3.26% in H1 2019.
As a result, all the sub-components of Lebanon’s consumer price index (CPI) increased over the studied period. For instance, the average costs of “Housing and utilities”, inclusive of water, electricity, gas and other fuels (grasping 28.4% of the CPI) added a yearly 1.48% by June 2020, as “Owner-occupied” rental costs (13.6% of Housing and utilities) rose by 4.22% year-on-year (YOY) while the average prices of “water, electricity, gas, and other fuels” (11.8% of Housing & utilities) decreased by 2.56% YOY. Moreover, average prices of “Food and non-alcoholic beverages” (20% of CPI) soared by 108.88% in H1 2020. Food overall has become more expensive mainly due to the collapsing currency, the dollar shortage in the market and the absence of proper monitoring authorities on the market players’ pricing and profit margins.
Similarly, the average prices of “Transportation” (13.1% of the CPI), “Health” (7.7% of the CPI) and “Education” (6.6% of CPI) increased across the board, by annual rates 34.76%, 3.81% and 4.06%, respectively, over the period. It is worth noting that Transportation costs continued to increase despite the 41% annual drop in the average of international oil prices which stood at $39/barrel by June 2020.
Remarkably, the average costs of “Clothing and Footwear” (5.2% of CPI) surged by a substantial 130.07% YOY by June 2020. Likewise, average prices of “Furnishings and household equipment” (3.8% of CPI) and “Alcoholic beverages and tobacco” (1.4% of CPI) increased by 124.36% and 123.45%, respectively, in H1 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.
Average inflation Rate in H1
Source: CAS