Lebanon officially recorded two percent inflation from July 2012 to July 2013, new figures from the official Central Administration of Statistics (CAS) have shown. The numbers are a steep decline from the last year in which inflation has been between eight and 10 percent.
The reason for the decline is one of methodology, not actual prices. For the past year, official inflation has been artificially exaggerated. From August 2009 through June 2012 — a period of three years — CAS did not survey the housing sector. When it did in July 2012, prices had jumped 44 percent from the previous survey.
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The effect on the overall consumer price index (CPI) was drastic. Since inflation is calculated using the previous year’s index as a baseline, each month following the housing survey falsely recorded skyrocketing inflation, ranging from 8.8 to 11.1 percent.
While price data was not collected from January to May 2013, official figures for these months would almost certainly remain in the same band due to the housing survey’s effect.
July 2013 is the first month that takes last year’s housing survey as a baseline, returning top-line numbers to normality.
While July’s overall inflation was two percent over a year prior, prices of clothing and footwear dropped 4.2 percent over the previous month, putting year-on-year inflation for the sector at -6.7 percent.
Energy and water prices increased 0.9 percent over June — reflecting a typical mid-summer price increase — and 2.4 percent over the previous year. And despite the ongoing effects of the Syrian conflict, hotels and restaurants registered a 5.2 percent increase year-on-year.
As the latest report makes clear, though, no new housing survey has been carried out since July 2012. That means the new inflation figures do not take housing price changes over the past year into account — let the price-watcher beware.