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 137.75% in August 2021 to register higher levels of 161.89% in August 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 99.89% by August 2022. Also, “Owner-occupied” rental costs increased by 6.01% year-on-year (YOY) and the average prices of “water, electricity, gas, and other fuels” followed a significant increase by 394.27% 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 198.11% 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 294.85% and 271.23% respectively by August 2022. Also, “Restaurant and Hotels” (2.6% of CPI) increased yearly by 194.66% by August 2022 as the hospitality sector had been authorized to adopt prices listed in dollars.
In the same token, costs of “Clothing and Footwear” (5.4% of CPI) surged by 143.70% by August 2022, and the prices of “Communication” (4.6% of the CPI) increased by 207.91%.
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 128.18%, 116.25%, and 149.09%, respectively, by August 2022.
The pace of the inflation in Lebanon remains relatively at elevated levels but with softer pace in August 2022. Price volatility, higher fuel bills and significant devaluation of the Lebanese pound are still a major concern for the Lebanese population. However, as Lebanon set to abandon its decades-long currency peg and re-peg it to 15,000, inflation is projected to jump higher as governmental transactions and taxes would likely push prices up while more currency in circulation would lead to a further devaluation for the Lebanese pound.
Inflation rate by August 2022
Source: CAS, BLOMINVEST