Lebanon Faces Hyperinflation as Prices Skyrocket

Newsdesk
3 Min Read

Lebanon is experiencing a severe economic crisis that has pushed the country into hyperinflation, the first in the Middle East and North Africa region. The annual inflation rate reached 264% in March 2023, the highest since comparable records began in 2008, according to the Central Administration of Statistics. The prices of food and non-alcoholic beverages, which account for 20% of the consumer price index, soared by 352% in March, making basic necessities unaffordable for many Lebanese.

The crisis is driven by a combination of factors, including a chronic fiscal deficit, a massive public debt, a shortage of foreign currency reserves, a collapse of the banking system, political instability, and the impact of the COVID-19 pandemic. The Lebanese pound, which was pegged to the US dollar at 1,507.5 since 1997, has lost more than 80% of its value this year. The official exchange rate was devalued by 90% in February 2023 to 15,000 pounds per dollar, but the black market rate is much higher, reaching around 96,000 pounds per dollar as of May 2023.

The devaluation has eroded the purchasing power of millions of Lebanese who earn their income in local currency. The minimum wage for private employees is now equivalent to $93 per month, while the average monthly cost of living for a family of four is estimated at $1,500. Many people are struggling to buy basic goods such as bread, milk, eggs, and olive oil, which have become luxury items for some. Some people have resorted to bartering goods or services to cope with the situation.

The crisis has also triggered social unrest and protests across the country, demanding political reforms and accountability from the ruling elite. The international community has conditioned its financial assistance to Lebanon on the implementation of structural reforms and anti-corruption measures.

Lebanon is facing its worst crisis since the end of the civil war in 1990. The country needs urgent and comprehensive action to restore confidence, stability, and growth. However, without a functioning government and a credible plan to address the root causes of the crisis, Lebanon risks further deterioration and social collapse

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