Economic Research | Lebanon This Week | Lebanon This Week 637 | Consumer Price Index up 29% in first five months of 2020 | Lebanon | Byblos Bank

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Byblos Bank

Lebanon This Week 637

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Consumer Price Index up 29% in first five months of 2020

The Central Administration of Statistics' Consumer Price Index increased by 28.6% in the first five months of 2020, compared to a growth of 3.6% in the same period of 2019. Also, the CPI expanded by 56.5% in May 2020 from the same month of 2019, the highest increase since December 2008. The cumulative surge in inflation in the first five months of 2020 is due in part to the deterioration of the Lebanese pound's exchange rate on the parallel market that encouraged opportunistic wholesalers and retailers to raise consumer prices disproportionately. It also reflects the authorities' inability to monitor and to contain the price hikes. 

The CAS claimed that it has faced challenges in data collection since March 2020 due to missing items at outlets, the temporary closure of retail outlets, and restrictions on the movement of data collectors. As such, it imputed the missing data by using the price changes of similar products. As such, it said that 47% of the prices included in the March CPI basket were imputed, 80% of prices in the April basket were imputed, and 62.3% of prices in the May CPI basket were imputed.

According to CAS' adjusted methodology, prices at restaurants & hotels grew by 3.4 times annually in May 2020, followed by the prices of alcoholic beverages & tobacco (+3 times), food & non-alcoholic beverages (+2.9 times), the cost of clothing & footwear (+2.7 times), the prices of furnishings & household equipment (+2.4 times), miscellaneous goods & services (+93.6%), communication costs (+79.3%), recreation & entertainment (+60.5%), transportation (+30.2%), actual rents (+7.9%), healthcare costs (+5.8%), imputed rents (+5.2%), and the cost of education (+4%). In contrast, the prices of water, electricity, gas & other fuels decreased by 12.7% annually in May 2020. In addition, the distribution of actual rents shows that old rents grew by 10.4% and new rents increased by 6.2% in May 2020.
 
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