CPI Starts 2025 with Modest Increase
The consumer price index (CPI) rose by 1.10 percent in January 2025, showing a 16.09 percent increase from January 2024 to January 2025, according to Lebanon’s Central Administration of Statistics. Despite significant events in January, such as Joseph Aoun becoming president, Nawaf Salam being appointed prime minister, and Israel delaying its withdrawal from South Lebanon, the CPI results did not show any major changes compared to previous months.
Monthly CPI Increase Slows
For the first time since October, the monthly CPI increase slowed, rising by 1.10 percent in January. This follows increases of 2.02 percent, 2.30 percent, and 2.38 percent in the previous three months. Annually, the increase was lower than December’s 18.2 percent but higher than October’s 15.68 percent and November’s 15.38 percent.
Price Fluctuations Similar to Early 2020
The price fluctuations in Lebanese pounds are similar to those seen in early 2020, during the initial months of the economic crisis. The national currency had sharply depreciated, losing over 90 percent of its value before stabilizing in mid-2023. Despite the stabilization, annual inflation remains high at over 16 percent.
Miscellaneous Goods and Services See Sharp Increase
Most CPI subcategories saw modest changes, except for miscellaneous goods and services, which increased by 9.18 percent. This was mainly due to higher insurance premiums in the medical sector, which rose by 15 to 25 percent between January and February.
Housing and Transportation Costs Rise
Housing and transportation costs increased by 1.91 percent and 1.77 percent, respectively, in January. Annually, these costs rose by 17.21 percent and 10.25 percent.
Clothing Prices Drop
Clothing prices fell by 2.10 percent in January, a common trend after the holiday season when retailers offer discounts. Annually, this category rose at a slower rate than the overall CPI.
Regional CPI Changes
The CPI increased in all regions except the Bekaa, which saw a slight decrease of 0.07 percent. Nabatieh had the highest increase at 2.62 percent, followed by Mount Lebanon (1.44 percent), North Lebanon (1.05 percent), Beirut (0.61 percent), and South Lebanon (0.15 percent).
How Badly Inflation Effected The Lebanese Economy
- Currency Drop: The Lebanese pound lost over 90% of its value since 2019.
- Higher Costs: Prices for things like healthcare and communication went up a lot.
- Economic Shrink: The economy shrank by about 40%.
- More Poverty and Job Losses: Many people lost jobs and fell into poverty.
- Savings Lost Value: People’s savings lost value due to the currency drop.
- Less Tax Revenue: The government collected less tax money, worsening the crisis.
