Lebanon witnessed another dramatic inflation surge in September as the political and economic crisis deepened with no solution in sight.
The consumer price index (CPI) inflation rate in Lebanon exceeded 131 percent by the end of September year-on-year, as prices of goods and services rocketed after a sharp depreciation in the Lebanese pound in the parallel market, according to figures released Wednesday by the Central Administration of Statistics (CAS).
This is the highest inflation level recorded since CAS began releasing this series in December 2008, a source at CAS told Arabian Business.
Price growth is soaring to levels last seen in the aftermath of the country’s civil war three decades ago after Lebanon’s currency depreciated sharply on the black market and made imports more expensive.
The CPI, which measures changes in the prices paid by consumers for a basket of goods and services, serves as an indicator of the sustained increase of prices.
Politicians have failed for three months to form a new government capable of finding solutions to the economic crisis, even after a devastating explosion in Beirut on August 4.
All sub-components of the latest consumer price index increased, with food prices, which accounts for 20 percent of weighting in the CPI, up by 570 percent at the end of September and furniture and household equipment prices up by 699 percent.
Prices for water, electricity, gas and other fuels rose only 21.69 percent a year because the government maintained subsidies for petroleum products.
Lebanon’s Central Bank governor Riad Salameh said earlier that the central bank would have to stop subsidies if it needs to dip into cash reserves that commercial lenders are required to hold with the monetary authority.
High inflation means many goods have become unaffordable for Lebanese citizens.
Clothing and footwear were 425.3 percent more expensive than a year ago, while prices at restaurants and hotels rose by almost 522 percent, transportation (+131.7 percent), communication (+89 percent), healthcare costs (+16.6 percent), actual rents (+11.4 percent), imputed rents (+6.8 percent) and the cost of education (+4.4 percent).
Lebanon’s peg to the dollar has increasingly withered after the government’s default on $30 billion in Eurobonds in March. The local currency is now trading at around 7,500 per US dollar, compared to a fixed official exchange rate of 1,507.5.
The Economic and Social Commission for Western Asia (ESCWA) has estimated that 55 percent of the country’s population is now trapped in poverty and struggling to meet basic needs.
Lebanon is the first country in the Middle East and North Africa to enter hyperinflation as its inflation rate exceeds 50 percent for 30 consecutive days.
Follow us on
