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 89.7% in June 2020 to reach a dramatic level of 100.64% in June 2021.
In more details, the average inflation rate by June 2021 reached 131.92%, higher 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 turn, the cost of “Housing and utilities”, inclusive of water, electricity, gas and other fuels (grasping 28.4% of the CPI) added a yearly 38.02% by June 2021, where “Owner-occupied” rental costs increased by 4.17% year-on-year (YOY) while the average prices of “water, electricity, gas, and other fuels” increased by 102.87% YOY.
Looking at the prices of “Food and non-alcoholic beverages” (20% of CPI), it surged by 221.80% 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 195.44%, 21.44% and 100.53%, respectively, by June 2021.
We also note that the costs of “Clothing and Footwear” (5.2% of CPI) surged by 172.08% by June 2021, and the prices of “Communication” (4.5% of the CPI) increased by 34.60%.
Worth mentioning, prices of “Furnishings and household equipment” (3.8% of CPI), “Alcoholic beverages and tobacco” (1.4% of CPI), and “Recreation, amusement, and culture” (2.4% of the CPI) increased by 194.01%, 180.21%, and 108.63%, respectively, by June 2021.
Undoubtedly, the fate of subsidies of essential basics was unavoidable as the Central Bank’s dwindling foreign reserves can no longer cover so much. However, removing subsidies today without any parallel plan by the government can only cause massive hike in prices, and eventually it could lead to a social catastrophe at an unprecedented scale for the country.
Inflation rate by June 
Source: BlomInvest, Central Administration of Statistics (CAS)