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 17.5% in March 2020 to reach a dramatic level of 157.86% in March 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 March 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 26.88% by March 2021, where “Owner-occupied” rental costs rose by 5.17% year-on-year (YOY) and the average prices of “water, electricity, gas, and other fuels” increased by 63.47% YOY.
Looking at the prices of “Food and non-alcoholic beverages” (20% of CPI), it surged by 394.81% 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 234.28%, 17.43% and 10.22%, respectively, by March 2021.
We also note that the costs of “Clothing and Footwear” (5.2% of CPI) surged by 546.64% by March 2021, and the prices of “Communication” (4.5% of the CPI) increased by 104.87%.
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 693.02%, 249.34%, and 437.39%, respectively, by March 2021.
Lebanon is facing a severe economic depression for the third consecutive year. In turn, the country is struggling to survive on the edge of a collapse resulting from protracted absence of a functional government, compound financial and social crises. Not to mention the devaluation of the Lebanese pound along with shortage in foreign currency all contributing to further increase in the inflation rate in the upcoming period.
Inflation rate by March
Source: BlomInvest, Central Administration of Statistics (CAS)