Falling food, housing, clothing and transport prices coupled with a high prior-year base widened Lebanon’s CPI deflation to 4.7% y/y in September from 4.6% y/y the month before, 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.
Falling crude oil prices, coupled with weak tourism activity and related demand will keep the CPI index in negative territory in Q4.
In monthly terms, the CPI dropped 0.3% in September, narrowing from a 0.5% m/m decline a month earlier.
Food and non-alcoholic beverage prices (20.6% of the basket) rose 1.2% m/m in September (up 1.5% m/m in August) on unfavourable seasonal factors that lifted fresh produce prices. In annual terms, food prices contracted 0.9% during the month.
Clothing and footwear prices dropped 3.4% y/y in September as shops offered seasonal discounts to lure clients.
Housing charges dropped 0.5% m/m and 7.8% y/y in September on plummeting utilities charges (down 21.4% y/y). Rent costs grew a mild 1.7% y/y during the month due to low prior-year base effect.
Transport prices (13.1% of the index) shrank 12.8% y/y in September on a 3.2% monthly decline as the government cut fuel prices. The high prior-year base will keep transport costs in negative territory in the near term.
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