Lebanon records highest nominal food price inflation rate in the world: World Bank
Lebanon, reeling from its worst-ever financial crisis for the past four years, has recorded the highest nominal food price inflation rate in the world, according to a recent World Bank assessment.
The period covered in the report on global food security is between February 2022 and February 2023.
Registering a whopping 261% annual change in the food Consumer Price Index, it came ahead of Zimbabwe which registered 128% annual change. Other countries which followed included Argentina, Iran and Turkey.
Last year, the World Bank approved a $150 million soft loan for food security in Lebanon to stabilise bread prices during the coming months after subsidies were gradually lifted.
The lifting of these subsidies, due to dwindling foreign currency reserves, led to a sharp increase in bread prices, amongst other commodities such as fuel and medicine.
Having relied on grain imports from Ukraine before Russia’s invasion, Lebanon said it was forced to look for other sources.
As of March, a government decision began allowing supermarkets to start pricing some items in US dollars instead of the nose-diving local currency. Customers can pay in either currency.
Since the start of the crisis, stores had begun to adjust their prices in Lebanese Pounds (LBP), sometimes daily, to keep up with the fluctuating exchange rate - or at times pushing prices higher.
The Lebanese currency has plunged to an all-time low, circulating at roughly 97,000 LBP to the US dollar on the black market on Monday. Pegged at 1,507 LBP to the dollar before 2019, it is now officially pegged at 15,000 LBP.
The historic financial and economic meltdown has been blamed on decades of rampant corruption and gross mismanagement by the ruling political elite.
Successive governments and powerful political leaders, their parties and other individuals linked to them are accused of both squandering and embezzling tens of billions of dollars.
The crisis has locked people out of their bank savings and seen large segments of society slip into poverty. Hundreds of thousands have left the country and basic public services – particularly the energy sector – are largely dysfunctional.
The deadly August 4, 2020, explosion at the Beirut Port further deepened the crisis.
Rival political factions have failed to carry out the necessary fiscal and administrative reforms required to unlock a multi-billion dollar loan from the International Monetary Fund (IMF). Politicians have also failed to elect a new president since November last year.
In March, the IMF warned that Lebanon was "at a very dangerous moment" because of the ruling class’s slow progress on reforms.