In October 2019, following years of dysfunctional public policies, Lebanon entered the vortex of an unprecedented collapse. This was evidenced by, among other indicators, a further dramatic decline in economic growth rates, exceptional primary deficits and a negative balance of payments, a banking sector in crisis, and the emergence of a parallel foreign exchange (FX) rate in a country that imports most of its consumption needs. The increase in consumption prices is one of the most revealing indicators of these structural dysfunctions, and one of the most influential on the lives of the country’s residents—the majority of whose salaries are in the national currency. Using the Consumer Price Index (CPI) of the Consultation and Research Institute (CRI) consultancy firm, which has been issuing a monthly CPI for Greater Beirut since 1977, we have predicted the inflation trend over the medium term. (The CPI was the only inflation indicator in Lebanon
Kamal Hamdan is managing director of the Consultation & Research Institute, a Beirut-based consultancy that produces the city’s leading consumer price index.
