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 eased from a 201.07% in November 2021 to register softer levels of 142.37% in November 2022, though it remains at a historical elevated level. Note that we expect rates to fall due to lower base effects.
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 74% by November 2022. Also, “Owner-occupied” rental costs increased by 10.99% year-on-year (YOY) and the prices of “water, electricity, gas, and other fuels” followed a significant increase by 234.69% YOY as subsidies were removed by the Central Bank and prices went up sharply on the global market due to the war in Ukraine. Nevertheless, prices are expected to surge further in the coming period once the customs would be collected at the rate of 15,000 LBP/USD instead of 1507.5 LBP/USD.
Looking at the prices of “Food and non-alcoholic beverages” (20% of CPI), it surged by 171.24% 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 181.64% and 171.75% respectively by November 2022. Also, “Restaurant and Hotels” (2.8% of CPI) increased yearly by 176.3% by November 2022 as the hospitality sector had been authorized to adopt prices listed in dollars.
In the same token, costs of “Clothing and Footwear” (5.2% of CPI) surged by 138.96% by November 2022, and the prices of “Communication” (4.5% of the CPI) increased by 226.27%, the second highest after fuels.
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 113.32%, 147.61%, and 140.86%, respectively, by November 2022.
As Lebanon started to implement a new exchange rate of LBP15,000 per USD on customs in December, we expect that it will lead to a further increase in prices on all products and services. Poverty rate has reached alarming levels and food insecurity is more and more apparent in Lebanon, due to a decline in economic activity, political instability and rising costs of living. Unfortunately, the response of the authorities is failing to ensure everyone’s right to an adequate standard of living, including the right to food.
Inflation rate by November 2022
Source: CAS, BLOMINVEST