Lebanon’s first official devaluation in a quarter century fired up consumer prices in March, with food and beverage inflation exceeding an annual 350% as authorities struggle to contain the crash in the world’s worst performing currency this year.
(Bloomberg) — Lebanon’s first official devaluation in a quarter century fired up consumer prices in March, with food and beverage inflation exceeding an annual 350% as authorities struggle to contain the crash in the world’s worst performing currency this year.
A decision in February to allow the pound to weaken by 90% has ended last year’s relative respite from galloping costs in Lebanon, whose economy cratered and forced the government to default on $30 billion of international debt in 2020.
Inflation already took off in February and surged near an annual 264% in March, more than doubling since the end of last year, according to data released by the official Central Administration of Statistics on Tuesday.
A financial crisis that’s been described as one of the worst globally since the mid-19th century has already pushed three-quarters of the Middle Eastern country’s population into poverty, with a combination of triple-digit inflation and a currency meltdown wiping out people’s life savings.
Price growth is once more soaring to levels last seen in the aftermath of the country’s civil war three decades ago as Lebanon’s currency continues to depreciate sharply on the black market.
With Lebanon suffering from foreign-exchange shortages, inflation is likely to accelerate further as the pound drops to new lows and makes imports more expensive. The government has meanwhile lifted subsidies on all essential goods apart from wheat.
As a result, the cost of communication rose more than an annual 620% in March, the latest data showed, while alcohol and tobacco prices gained almost 451%.
–With assistance from Simbarashe Gumbo.
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