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Inflation

Year-on-year inflation more than doubled in July, government data show

Year-on-year inflation more than doubled in July, government data show

July was the 13th straight month inflation clocked in the triple digits year over year. (Credit: Mohamed Azakir/Reuters)

BEIRUT — Consumer prices more than doubled from July 2020 to July 2021, spurred by major increases in the prices of transportation and food, the latest data from Lebanon’s Central Administration of Statistics show.

The government agency’s consumer price index leaped 123 percent year-on-year, the latest in a string of triple-digit inflation figures as the country confronts its worst economic catastrophe since at least the Civil War, spurred by a 2-year-old financial meltdown that authorities have done little to address.

The most dramatic increase in July was in the cost of transportation, which skyrocketed by 253 percent when compared with a year prior — a more than threefold increase. The jump partly tracks the rise in fuel costs: whereas 20 liters of 95-octane gasoline cost LL24,000 at the end of July 2020, at the end of July 2021 it cost LL75,600.

The price increase owes largely to authorities’ June 24 decision to reduce the rate at which fuel is subsidized, providing importers with dollars at an exchange rate of LL3,900 instead of the official LL1507.5. Further increases are expected to be even higher in the August and September inflation reports as the effects of further subsidy cuts take hold. The subsidy was again reduced by more than half in August, with a decision to provide dollars to oil importers at a rate of LL8,000.

In CAS’ inflation report for July, the price of food and nonalcoholic beverages also rose significantly — by 248 percent year on year. Lebanese are spending more than triple what they used to on food despite an oversupply of local produce that usually gets exported to the Gulf market but has been effectively blocked by a Saudi government decision. Pre-crisis, up to 80 percent of Lebanon’s food supply was imported, making consumers highly vulnerable to the ongoing depreciation of the lira, which has lost more than 90 percent of its value since the financial crisis began. Many Lebanese are substituting local or regional products for international ones, or foregoing certain categories of food, such as meat, altogether.

Prices also more than doubled year on year for alcoholic beverages and tobacco; clothing and footwear; water, electricity and cooking gas; furniture; health care; amusement; and restaurants. The only areas where prices did not at least double are housing, communications and education, which are subject to varying amounts of government price controls.


BEIRUT — Consumer prices more than doubled from July 2020 to July 2021, spurred by major increases in the prices of transportation and food, the latest data from Lebanon’s Central Administration of Statistics show.The government agency’s consumer price index leaped 123 percent year-on-year, the latest in a string of triple-digit inflation figures as the country confronts its worst economic...