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 110.24% in April 2021 to register a record high of 222.88% in April 2022.
In details, the cost of “Housing and utilities”, inclusive of water, electricity, gas and other fuels (grasping 28.5% of the CPI) added a yearly 115.73% by April 2022. Also, “Owner-occupied” rental costs increased by 17.43% year-on-year (YOY) and the average prices of “water, electricity, gas, and other fuels” followed a significant increase by 397.92% YOY. In fact, in April 2021, gas and other fuels were still subsidized by BDL, whereas in April 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” (20.6% of CPI), it surged by 406.5% yearly. In turn, the average prices of “Transportation” (13.1% of the CPI) and “Health” (7.8% of the CPI) recorded hikes of an annual 470.93% and 411.94% respectively by April 2022. Also, “Restaurant and Hotels” (2.6% of CPI) increased yearly by 229.42% by April 2022, as Lebanon witnessed high cases of Covid-19 in April 2021 and people were nervous to go out to restaurants.
In the same token, costs of “Clothing and Footwear” (5.4% of CPI) surged by 163.7% by April 2022, and the prices of “Communication” (4.6% of the CPI) increased by 5.36%.
Finally, prices of “Furnishings and household equipment” (3.7% of CPI), “Alcoholic beverages and tobacco” (1.6% of CPI), and “Recreation, amusement, and culture” (2.3% of the CPI) increased by 194.92%, 206.49%, and 191.71%, respectively, by April 2022.
More than 70% of the Lebanese people are now under the poverty line, while the majority of them are unable to secure basic needs. The High inflation rate is mainly linked to the huge depreciation of the national currency (It increased from LBP/USD 12,200 in April 2021, to LBP/USD 25,760 in April 2022) combined by the worldwide inflation due to several economic and political factors, such as the Russian-Ukrainian’s war that led to the increase of food and energy prices.
Inflation rate by April 2022
Source: CAS, BLOMINVEST