Lebanon’s CPI deflation narrows to 4.1% y/y in October

By bne IntelliNews November 23, 2015

Falling food, housing, clothing and transport prices kept Lebanon’s CPI in negative territory during October, recoding a 4.1% y/y deflation despite narrowing mildly from a 4.7% annual contraction a month earlier, data from the statistics office CAS showed. The IMF forecasts Lebanon’s CPI inflation to brake to a mere 0.1% in 2015 from 1.9% last year.

In monthly terms, the CPI, however, rose 0.8% in October, reversing a 0.3% m/m deflation a month earlier on rising clothing and food costs.

Food and non-alcoholic beverage prices (20.6% of the basket) rose 0.8% m/m in October on unfavourable seasonal factors and strong local demand that lifted fresh produce prices. In annual terms, food prices contracted 0.8%, compared to a 0.9% annual decline in September.

Clothing and footwear prices climbed 10.4% m/m in October on lack of seasonal discounts and strong demand ahead of the education year. In annual terms, clothing and footwear costs rose just 1.4% in October. Alcoholic beverage and tobacco prices climbed 5% y/y during the month on sustained strong private consumption.

Housing charges ticked up a marginal 0.3% m/m but fell 7% y/y on plummeting utilities charges (down 19.6% y/y). Rent costs grew a mild 1.8% y/y during the month due to low prior-year base effect.

Transport prices fell 0.8% m/m and 12.7% y/y as the government cut fuel costs amid lower energy prices.

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