Surg­ing in­fla­tion takes toll on Le­banon’s blast re­cov­ery

The Daily Telegraph - Business - - Business - By Tim Wal­lace

SURG­ING prices are forc­ing fresh hard­ship on Le­banon as last month’s ex­plo­sion com­bines with a po­lit­i­cal and eco­nomic cri­sis and the coro­n­avirus pan­demic.

Prices more than dou­bled com­pared with Au­gust 2019 as in­fla­tion surged to 120pc, and food and drink prices are

more than four times their level a year ago, up 367pc.

Clothes and shoes are more than five times their old prices, with fur­ni­ture and home main­te­nance costs up al­most eight-fold. Trans­port costs have dou­bled, with tele­coms prices not far be­hind. Prices charged by restau­rants and ho­tels are up more than 500pc. Hous­ing costs are up, but by a far lower amount. Rents are up by just be­low 9pc on the year, with util­i­ties bills ris­ing by just over one fifth.

Health costs are up by al­most 15pc, with ed­u­ca­tion prices ris­ing by be­low 5pc. The ex­plo­sion in Beirut’s port dev­as­tated large parts of the city, killing hun­dreds, in­jur­ing thou­sands and caus­ing ma­jor prob­lems for trade and the wider econ­omy, but it is not the sole root of Le­banon’s woes.

Monthly in­fla­tion in Au­gust was 3.6pc – steep by the stan­dards of more sta­ble economies, but Le­banon’s low­est rate since Fe­bru­ary. Back in April, prices rose by more than one quar­ter in a sin­gle month.

The gov­ern­ment de­faulted on pay­ments of debts de­nom­i­nated in for­eign cur­ren­cies in March, and re­mains in trou­ble on those loans. It means the coun­try has been in lengthy ne­go­ti­a­tions with cred­i­tors, and so is in a dif­fi­cult po­si­tion to raise cru­cial funds for re­build­ing the cap­i­tal city.

Michel Aoun, the pres­i­dent, said the na­tion was “go­ing to hell” if a new ad­min­is­tra­tion was not pieced to­gether, but warned there was “no so­lu­tion on the hori­zon to form a new gov­ern­ment”.

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