Consumer goods see yet another price hike, but monthly increase is slowing

BEIRUT – The monthly consumer price index recorded its 19th triple-digit increase. The reading, up 239.68 percent compared to January 2021, is the largest percentage increase since the start of Lebanon’s financial and economic crises.

Here’s what we know:

    • The average US dollar-to-lira rate was around LL26,000 in December, compared to LL26,500 in January, when the lira slid to its all-time low of LL33,700, forcing the central bank to upgrade Circular 161 and inject an unlimited amount of US dollar to calm the currency market.

    • Even though the year-on-year increase is the highest recorded so far, the monthly change seems to have slowed down to single digits, to 7.69 percent. This reading comes on the back of a 16.53 percent increase in December, a 10.63 percent increase in November and a 16.42 percent increase in October.

    • All major categories saw an increase month-over-month, except for “clothing and footwear” which dropped 1.09 percent.

    • The report also shows a 68.68 percent increase in the price of “miscellaneous goods and services,” which include personal care products such as perfumes, toothpaste, hairdresser services, makeup and insurance services. This category increased a total of 310.65 percent from 507.57 in January 2021 to 2,084.33 in January 2022 and 68.68 percent from 1,235.66 in December 2021. The reason behind the large increase was not detailed in the report and staff at the Central Administration of Statistics (CAS) were not available to comment.

    • Prices have increased nine times since October 2019 while the current parallel market rate is around 14 times the official peg of LL1507.5 to the US dollar.

    • The effect of the stabilization of the US dollar-to-lira rate, around LL20,000 to LL21,000, should start to show a lower month-over-month inflation reading in the February report.