BEIRUT — Food prices nearly quadrupled in March 2021 compared to the same month last year, while clothing prices were more than five times higher than in March 2020.
The huge change in prices is linked to the Lebanese lira’s record plunge against the dollar last month. The lira dropped as low as LL15,300 to the dollar in mid-March, forcing several grocery stores across the country to shut down their doors as they struggled to determine at what price to sell their products.
Food and non-alcoholic beverage prices rose by 395 percent in March 2021, year over year, while clothing and footwear prices increased by 547 percent, according to figures published Wednesday by the Central Administration of Statistics, a government agency.
The consumer price index, which measures inflation — the change in prices of a basket of goods and services over a period of time — was 158 percent higher in March 2021 than in March 2020. By comparison, the inflation rate stood at 17.5 percent for March 2019–20 and just 4 percent the year before that, highlighting the drastic impact of the national currency devaluation on living expenses.
Furnishings, household equipment and routine household maintenance expenses soared by 693 percent, while restaurant and hotel prices increased by 722 percent, the government agency reported. Transportation fees rose by around 234 percent, it added.
The central bank’s dwindling dollar reserves are being depleted to subsidize imports of basic necessities through special exchange mechanisms that offer a discount on the market rate. Wheat, fuel and medicine are being subsidized at the official rate of LL1507.5 to the dollar, while a basket of foodstuffs and other supplies is subsidized at Banque du Liban’s platform rate of LL3,900 to the dollar.
As a result, health care expenses, which are mostly still priced at the official exchange rate, rose by just 17.4 percent year over year. Meanwhile, domestic water supply, electricity, gas and other fuel prices rose by about 27 percent.
However, as prices soar, the minimum wage in Lebanon remains LL675,000 per month, which while worth $450 at the official exchange rate is now valued at just $55 at the current market exchange rate of LL12,250 to the dollar.