Lebanon’s inflation skyrocketed to a staggering 260% annually in May, as the political deadlock over presidential elections continued to hamper essential reform efforts required to extricate the nation from its most severe economic crisis.
Hyperinflation has been relentless, marking its 35th consecutive month, as the national currency persistently depreciates on both parallel and official markets following a 90% devaluation since early February.
The Consumer Price Index (CPI) reflects a significant cost-of-living increase, mainly driven by rocketing communication costs, higher prices for alcoholic beverages and tobacco, and a surge in restaurant and hotel prices. The CPI saw an approximate 5.4% rise from April 2023.
Despite seeing a decline after peaking at 171% last year, which was the highest in nearly four decades, and 155% in 2021, Lebanon’s inflation rate began to climb once again earlier this year after the central bank devalued the Lebanese pound in February.
The official exchange rate was adjusted to 15,000 pounds to the US dollar, compared to the longstanding peg of 1,507.50 to the dollar since 1997.
Currently, Lebanon is grappling with a severe economic crisis, regarded by the World Bank as one of the most catastrophic in recent history.
The country is yet to implement vital structural and financial reforms necessary to access $3 billion in aid from the International Monetary Fund, along with additional billions from other international donors.
Governed by a caretaker cabinet under Prime Minister Najib Mikati with limited powers, Lebanon urgently needs to elect a president following the conclusion of Michel Aoun’s six-year term last October.