According to the Central Administration of Statistics (CAS), the Consumer Price Index (CPI), which gives an overview about the evolution of goods and services’ prices consumed by households, revealed that Lebanon’s monthly inflation rate soared from 11.4% in February 2020 to reach a dramatic level of 155.40% in February 2021.
This upsurge in the inflation rate can be attributed in part to the incapacity of authorities to contain prices and monitor the crises, as well as to the deterioration of the Lebanese pound on the parallel market in the absence of a rescue government, which let some wholesalers and suppliers to increase the prices of the products disproportionately.
Moreover, the inflation rate in February 2021 registered a higher rate than the average inflation rate of 84.27% in year 2020. Accordingly, all sub-components of Lebanon’s consumer price index (CPI) increased over the studied period.
In details, the cost of “Housing and utilities”, inclusive of water, electricity, gas and other fuels (grasping 28.4% of the CPI) added a yearly 23.18% by February 2021, where “Owner-occupied” rental costs rose by 6.49% year-on-year (YOY) and the average prices of “water, electricity, gas, and other fuels” increased by 49.67% YOY.
Looking at the prices of “Food and non-alcoholic beverages” (20% of CPI), it surged by 417.07% yearly. 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 hikes of an annual 228.95%, 17.22% and 10.25%, respectively, by February 2021.
We also note that the costs of “Clothing and Footwear” (5.2% of CPI) surged by 611.85% by February 2021, and the prices of “Communication” (4.5% of the CPI) increased by 105.91%.
Worth mentioning, prices of “Furnishings and household equipment” (3.8% of CPI), Recreation, amusement, and culture” (2.4% of the CPI), and “Alcoholic beverages and tobacco” (1.4% of CPI) increased by 609.38%, 224.74%, and 388.14%, respectively, by February 2021.
This is the not the first triple digit increase in the inflation rate for Lebanon. Despite the fact that the CPI has soared, it is still far from the peak of what it reached during the country’s civil war. However, the lack of political will to implement reforms and rescue economic plan will push the inflation rate higher than ever and Lebanon’s population will find it extremely hard to secure their basic needs.
Inflation rate by February
Source: BlomInvest, Central Administration of Statistics (CAS)