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 112.4% in July 2020 to reach a dramatic level of 123.43% in July 2021.
In more details, the average inflation rate by July 2021 reached 130.71%, 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 40.93% by July 2021, where “Owner-occupied” rental costs increased by 4.77% year-on-year (YOY) while the average prices of “water, electricity, gas, and other fuels” increased by 111.29% YOY.
Looking at the prices of “Food and non-alcoholic beverages” (20% of CPI), it surged by 248.13% yearly. In turn, the average prices of “Transportation” (13.1% of the CPI), “Health” (7.7% of the CPI) and “Restaurant and Hotels” (2.8% of CPI) all recorded hikes of an annual 252.63%, 177.38% and 245.77%, respectively, by July 2021.
We also note that the costs of “Clothing and Footwear” (5.2% of CPI) surged by 184.20% by July 2021, and the prices of “Communication” (4.5% of the CPI) increased by 33.61%.
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 178.99%, 113.68%, and 115.20%, respectively, by July 2021.
It is worth mentioning that the IIF report on 16 September, shows two possible scenarios for Lebanon. A positive scenario depicts the new cabinet implementing economic reforms prior to the IMF financial support agreement by end of year. As such, eliminating subsidies on essential goods will be followed by inflationary pressures; but average inflation expected to decline from 140% in 2021 to 114% in 2022.
Inflation rate by July 2021