Lebanon’s CPI contracted 2.45% y/y in May, virtually the same as a month earlier, amid falling food, housing and transport prices, thus sustaining its downward pattern seen in 2015, data from the statistics office CAS showed. Lebanon’s CPI will remain in negative territory also this year with the IMF forecasting a contraction of 0.7%.

In monthly terms, the CPI ticked up a marginal 0.1%, braking from a 0.8% m/m increase in April on higher transport and housing charges.

The CPI index might swing into mild positive growth in June and July given the Ramadan factor which usually boost prices of food, clothing and entertainment as local demand soars.

Food and non-alcoholic beverage prices (20.6% of the basket) fell 2.4% m/m in May on favourable seasonal factors and low import inflation. The annual deflation thus widened to 3.2% from 2.4% in April.

Transport prices (13% of the basket) fell 6.3% y/y in May despite rising 1.2% m/m as the government upped fuel costs.

Housing charges (28.5% of the CPI index) rose 1.1% m/m in May but shrank 4.7% y/y, on falling utilities charges (down 14.1% y/y). Rent costs rose 3% y/y during the month.