Lebanon's inflation rate has recorded another increase of 211.43%, bringing the cumulative annual rise to an alarming 1178% by the end of May, compared to 378.25 points in the same month last year. This indicates a widening gap in emergency responses between ongoing attempts by the central bank to curb the collapse of the lira's exchange rate and the inability of ministries and public administrations to rein in blatant consumer system disarray.
According to a report followed by Al-Sharq Al-Awsat with market managers and traders, it was found that the pricing base for most food and goods maintains high cash exchange levels close to the 40,000 lira per dollar threshold, primarily justified by rising import invoices, ongoing increases in transportation costs, and electricity supply from private generators linked to soaring fuel prices. This is compounded by salary hikes, transportation allowances, and other logistical and administrative costs.
On the other hand, importers attribute their rising invoices to global inflation impacts affecting most goods and raw materials, reduced supply in primary markets against a backdrop of substantial demand increases, and growing difficulties in supply chain management, alongside higher transportation, energy, and global oil prices, which significantly add to import costs.
Only consumers are left without adequate answers. According to on-ground surveys, they manage to secure few of their daily needs, with most unable to ascertain the ideal "equation" for achieving parity between dwindling income in lira and the increasingly mounting minimum living costs month by month. Amid nearly unanimous consensus, until the dire conditions change, they express, "There is no life nor shame in the authority we call upon. We have reached a stage where we manage most public services ourselves, each according to their means, including electricity, water, education, health services, and more, and we are preparing to relinquish or reduce usage of communications and the internet, which will triple or quadruple in cost starting next month."
The ineffectiveness of regulatory agencies and the limited human and technical resources in institutions tasked with monitoring profit margins and consumer protection have contributed to dissipating the intended consumer impact from injecting dollars into the market through the "Sayrafa" platform managed by the Central Bank, averaging over 30 million lira daily at a rate approaching 25,000 lira per dollar. It's noted that relevant institutions, which delay tracking this issue, can obtain lists of importers and traders benefiting from platform operations and compel them to transfer dollar price differentials to consumers.
International organizations have not hesitated in their latest reports to hold the political class entirely responsible for the worsened living conditions, akin to a severe depreciation of the national currency, causing inflation rates to skyrocket into the hundreds, as reported by the World Bank recently. These crises have exacerbated social difficulties, disproportionately affecting poor and needy families, and widening the gap and inequality between social groups.
Amid political inertia, the unresolved crises have inflicted long-term damage on Lebanon's economy and society. Basic public services are collapsing, unemployment rates are sharply rising, and human capital is severely depleted. The private sector faces significant obstacles due to the paralysis of the financial system, leading to decreased company productivity and revenue generation, resulting in widespread layoffs and bankruptcies.
According to findings revealed by Olivier De Schutter, the UN Special Rapporteur on Extreme Poverty and Human Rights, four out of five residents live in poverty, and "more than half of families reported that their children have had to skip meals, with hundreds of thousands of children out of school." In his report issued earlier this month, he noted that "the devastating actions of political and financial leaders in Lebanon are responsible for pushing most of the country's population into poverty, in violation of international human rights law."
Returning to the latest inflation data, statistics from Lebanon's Central Administration of Statistics showed a monthly increase of 7.85% in the Consumer Price Index in May, compared to 7.1% the previous month. Hence, the average annual inflation increase reached 216% over the first five months of this year compared to the same period last year.
This annual rise in the index results from all its components recording price increases, including food and beverage prices rising by 363.78% (weighted at 20%), alongside transportation costs by 515.36% (weighted at 13.1%), and increases in housing, water, gas, electricity, and other fuel prices by 445.18% (weighted at 11.8%). The prices of clothing and footwear rose by 184.32% (weighted at 5.2%), not to mention the unprecedented hike in restaurant and hotel prices by 278.54% (weighted at 2.8%).
