BEIRUT: Latest official data has shown Lebanon’s inflation rate soared to 112.4 per cent year-on-year in July amid a severe economic meltdown. This is even before the Beirut Port explosion, which has further aggravated the country’s financial crisis.
Lebanon became the first country in the region to suffer from hyperinflation in July, according to Steve H Hanke, Professor of Applied Economics at Johns Hopkins University.
Inflation in Lebanon, whose plight worsened since defaulting on its sovereign debt in March, had risen 89.74 per cent year-on-year in June and 56.53 per cent year-on-year in May, figures from the government statistics department showed. The consumer price index rose a whopping 11.42 per cent in July compared to the previous month.
The central bank can now only subsidise fuel, wheat and medicine for three months, as foreign currency reserves rapidly dwindle. Banque du Liban Governor Riad Salameh said on Tuesday the central bank cannot use its obligatory reserve to finance trade once it reaches its minimum threshold.
Talks with the IMF for a bailout have stalled over inaction on long-demanded reforms to tackle entrenched corruption and mismanagement and an internal row over the size of vast financial losses.