According to the Central Administration of Statistics (CAS), the Consumer Price Index (CPI), representing the evolution of goods and services’ prices consumed by households, revealed that Lebanon’s monthly inflation rate jumped from 157.86% in March 2021 to register a record high of 208.13% in March 2022.
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 99.71% by March 2022. Also, “Owner-occupied” rental costs increased by 5.29% year-on-year (YOY) and the average prices of “water, electricity, gas, and other fuels” followed a significant increase by 389% YOY. In fact, in March 2021, gas and other fuels were still subsidized by BDL, whereas in March 2022, BDL had officially ended the fuel subsidy thus rising fuel prices sharply. In addition, Lebanon’s fuel crisis worsened with Russia’s invasion on Ukraine, putting increasing pressure on fuel prices.
Looking at the prices of “Food and non-alcoholic beverages” (20% of CPI), it surged by 390% yearly. In turn, the average prices of “Transportation” (13.1% of the CPI) and “Health” (7.7% of the CPI) recorded hikes of an annual 488.85% and 441.22% respectively by March 2022. Also, “Restaurant and Hotels” (2.8% of CPI) increased yearly by 349.45% by March 2022, noting that Lebanon was in lockdown due to the pandemic of Covid-19 in March 2021.
In the same token, costs of “Clothing and Footwear” (5.2% of CPI) surged by 176.1% by March 2022, and the prices of “Communication” (4.5% of the CPI) increased by 8.82%.
Finally, 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 178.38%, 206.49%, and 140.88%, respectively, by March 2022.
The 2021 inflation surge in Lebanon has been attributed to the sharp devaluation of the national currency in addition to the global supply chain crisis caused by the pandemic. However, absence of reform policies to mutate the situation as well as unexpected high energy costs will have a substantial impact on the socio-economic activity and expected inflation in 2022, making the latter depend on geopolitical developments and corrective measures by the Government.
Inflation rate by March
Source: CAS, BLOMINVEST
By: Stephanie Aoun