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 119.83% in May 2021 to register a record high of 211.43% in May 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 110.13% by May 2022. Also, “Owner-occupied” rental costs increased by 6.21% year-on-year (YOY) and the average prices of “water, electricity, gas, and other fuels” followed a significant increase by 445.18% YOY as subsidies were removed by the Central Bank and prices went up sharply on the global market due to the war in Ukraine.
Looking at the prices of “Food and non-alcoholic beverages” (20.6% of CPI), it surged by 363.78% 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 515.36% and 468.27% respectively by May 2022. Also, “Restaurant and Hotels” (2.6% of CPI) increased yearly by 278.54% by May 2022.
In the same token, costs of “Clothing and Footwear” (5.4% of CPI) surged by 184.32% by May 2022, and the prices of “Communication” (4.6% of the CPI) increased by 9.65%.
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 182.35%, 202.83%, and 138.99%, respectively, by May 2022.
Prices in Lebanon are recording high upward volatility since the start of the crisis. Opportunistic suppliers and retailers are raising the prices disproportionately as the authorities are failing to monitor and control retail prices. Furthermore, the war in Ukraine as well as Lebanese Lira’s instability is exacerbating the inflation issue for Lebanese economy. Lebanon is not immune from regional developments; however the risk to form a new Government would lead to further currency devaluation and inflation.
Inflation rate by May 2022
Source: CAS, BLOMINVEST