Bread coming off a production line at an automated bakery in Beirut. Russia’s war in Ukraine threatens food supplies in countries such as Lebanon, which depends on the Black Sea region for nearly all of its wheat. AP
Bread coming off a production line at an automated bakery in Beirut. Russia’s war in Ukraine threatens food supplies in countries such as Lebanon, which depends on the Black Sea region for nearly all of its wheat. AP
Bread coming off a production line at an automated bakery in Beirut. Russia’s war in Ukraine threatens food supplies in countries such as Lebanon, which depends on the Black Sea region for nearly all of its wheat. AP
Bread coming off a production line at an automated bakery in Beirut. Russia’s war in Ukraine threatens food supplies in countries such as Lebanon, which depends on the Black Sea region for nearly all

Lebanon expected to record second-highest inflation rate globally in 2022


Massoud A Derhally
  • English
  • Arabic

Lebanon is expected to post the second-highest inflation rate in the world this year, trailing only Sudan, according to Fitch Solutions.

Inflation in the country, which faces its worst economic crisis in more than three decades, will average 178 per cent in 2022, up from about 155 per cent last year, Fitch said.

This is an upward revision from Fitch's previous forecast of about 156 per cent for this year due to stronger inflationary pressures from the adjustment of telecommunications, port and customs tariffs, it said.

Inflation in the country will drop to 60 per cent in 2023 as the effects from the removal of subsidies will fade, Fitch said.

Runaway inflation in Lebanon rose to 210 per cent in June from the same month a year earlier, marking the 24th consecutive triple-digit increase of the Central Administration of Statistics' Consumer Price Index since July 2020. The index increased 9.23 per cent from May 2022.

While Inflation in the country continues unabated, it remains far from its peak of 741 per cent towards the end of 1987, during the civil war in the country from 1975 to 1990.

Inflation will be fuelled by high global commodities and oil prices, the continued depreciation of the Lebanese pound on the parallel market and on Sayrafa, the electronic trading platform regulated by Banque du Liban (BDL).

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"We believe that the gradual adoption of the Sayrafa exchange rate that BDL sets daily, which currently stands at 26,100 Lebanese pounds to the US dollar, instead of the official exchange rate of 1,507.5 pounds to the dollar, across several sectors will feed through higher inflationary pressures," Fitch said.

The Sayrafa exchange rate, which was adopted for telecommunications tariffs from July 1 and for port fees from August 1, 2022 will lead to "a significant increase" in phone and internet bills as well as in the cost of imported goods through the port, it said.

Fitch expects Lebanon's parliament to approve an adjustment to customs tariffs, which will push up the cost of imported non-essential goods, such as tobacco and alcohol, contributing to higher inflation.

It also expects Lebanese authorities to start reducing bread subsidies after the removal of the majority of subsidies on basic goods in 2021, which will lead to higher prices.

"The surge in wheat prices following Russia’s invasion of Ukraine along with BDL’s eroding foreign currency reserves will make it more challenging for the government to subsidise bread prices," Fitch said.

"In fact, the gradual increase in subsidised bread prices, which accelerated due to the supply tightness in the global and domestic wheat market since Russia’s invasion of Ukraine, led to the increase in bread prices to more than 30,000 Lebanese pounds in August from around 14,000 Lebanese pounds in March 2022. We foresee the upward trend in bread prices will continue, adding to the inflationary pressures."

Lebanon's economy collapsed after it defaulted on about $31 billion of Eurobonds in March 2020, with its currency sinking more than 90 per cent against the dollar on the black market.

The country's public debt ballooned to more than $100bn, or about 212 per cent of gross domestic product, in 2021.

Lebanon has the fourth-highest debt-to-GDP ratio in the world, surpassed only by Japan, Sudan and Greece, according to the World Bank.

The country's economy contracted about 58 per cent between 2019 and 2021, with GDP falling to $21.8bn in 2021, from about $52bn in 2019, according to the World Bank — the largest contraction on a list of 193 countries.

Fitch also warned that "a sharp spike in political risk due to heightened tensions with Israel over maritime borders dispute and/or in the run-up to the presidential elections could lead to more pronounced depreciation of the Lebanese pound on the parallel market".

Lebanon's political elite must agree on a new president by October 31, when Michel Aoun's six-year term expires.

Lebanon has historically been marred by political impasses that have created political vacuums. Politicians have yet to form a government three months after parliamentary elections were held, delaying the implementation of reforms that are a prerequisite to securing $3 billion from the International Monetary Fund.

Political wrangling left the country without a president for two and a half years until Mr Aoun's election by the 128-seat parliament in 2016. His predecessor, Michael Sleiman, was elected in 2008 after the position had been vacant for 18 months.

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Power: 248hp at 5,200rpm

Torque: 400Nm at 1,750-4,000rpm

Transmission: 8-speed auto

Fuel consumption: 9.1L/100km

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Mashrafe Mortaza (captain), Tamim Iqbal, Liton Das, Soumya Sarkar, Mushfiqur Rahim (wicketkeeper), Mahmudullah, Shakib Al Hasan (vice captain), Mohammad Mithun, Sabbir Rahaman, Mosaddek Hossain, Mohammad Saifuddin, Mehidy Hasan Miraz, Rubel Hossain, Mustafizur Rahman, Abu Jayed (Reporting by Rohith Nair in Bengaluru Editing by Amlan Chakraborty)

UAE currency: the story behind the money in your pockets

Company Profile 

Founder: Omar Onsi

Launched: 2018

Employees: 35

Financing stage: Seed round ($12 million)

Investors: B&Y, Phoenician Funds, M1 Group, Shorooq Partners

Benefits of first-time home buyers' scheme
  • Priority access to new homes from participating developers
  • Discounts on sales price of off-plan units
  • Flexible payment plans from developers
  • Mortgages with better interest rates, faster approval times and reduced fees
  • DLD registration fee can be paid through banks or credit cards at zero interest rates
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Engine: 2.0-litre 4-cylinder turbo hybrid

Transmission: eight-speed automatic

Power: 390bhp

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Engine: naturally aspirated 6.5-liter V12

Power: 819hp

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Director: Jesse Armstrong

Rating: 3.5/5

The specs

Engine: 3.9-litre twin-turbo V8

Transmission: seven-speed

Power: 720hp

Torque: 770Nm

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So what is Spicy Chickenjoy?

Just as McDonald’s has the Big Mac, Jollibee has Spicy Chickenjoy – a piece of fried chicken that’s crispy and spicy on the outside and comes with a side of spaghetti, all covered in tomato sauce and topped with sausage slices and ground beef. It sounds like a recipe that a child would come up with, but perhaps that’s the point – a flavourbomb combination of cheap comfort foods. Chickenjoy is Jollibee’s best-selling product in every country in which it has a presence.
 

The burning issue

The internal combustion engine is facing a watershed moment – major manufacturer Volvo is to stop producing petroleum-powered vehicles by 2021 and countries in Europe, including the UK, have vowed to ban their sale before 2040. The National takes a look at the story of one of the most successful technologies of the last 100 years and how it has impacted life in the UAE. 

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Read part three: the age of the electric vehicle begins

Read part two: how climate change drove the race for an alternative 

The specs: 2018 Mercedes-AMG C63 S Cabriolet

Price, base: Dh429,090

Engine 4.0-litre twin-turbo V8

Transmission Seven-speed automatic

Power 510hp @ 5,500rpm

Torque 700Nm @ 1,750rpm

Fuel economy, combined 9.2L / 100km

ESSENTIALS

The flights

Emirates flies from Dubai to Phnom Penh via Yangon from Dh2,700 return including taxes. Cambodia Bayon Airlines and Cambodia Angkor Air offer return flights from Phnom Penh to Siem Reap from Dh250 return including taxes. The flight takes about 45 minutes.

The hotels

Rooms at the Raffles Le Royal in Phnom Penh cost from $225 (Dh826) per night including taxes. Rooms at the Grand Hotel d'Angkor cost from $261 (Dh960) per night including taxes.

The tours

A cyclo architecture tour of Phnom Penh costs from $20 (Dh75) per person for about three hours, with Khmer Architecture Tours. Tailor-made tours of all of Cambodia, or sites like Angkor alone, can be arranged by About Asia Travel. Emirates Holidays also offers packages. 

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Profile of Foodics

Founders: Ahmad AlZaini and Mosab AlOthmani

Based: Riyadh

Sector: Software

Employees: 150

Amount raised: $8m through seed and Series A - Series B raise ongoing

Funders: Raed Advanced Investment Co, Al-Riyadh Al Walid Investment Co, 500 Falcons, SWM Investment, AlShoaibah SPV, Faith Capital, Technology Investments Co, Savour Holding, Future Resources, Derayah Custody Co.

Five hymns the crowds can join in

Papal Mass will begin at 10.30am at the Zayed Sports City Stadium on Tuesday

Some 17 hymns will be sung by a 120-strong UAE choir

Five hymns will be rehearsed with crowds on Tuesday morning before the Pope arrives at stadium

‘Christ be our Light’ as the entrance song

‘All that I am’ for the offertory or during the symbolic offering of gifts at the altar

‘Make me a Channel of your Peace’ and ‘Soul of my Saviour’ for the communion

‘Tell out my Soul’ as the final hymn after the blessings from the Pope

The choir will also sing the hymn ‘Legions of Heaven’ in Arabic as ‘Assakiroo Sama’

There are 15 Arabic speakers from Syria, Lebanon and Jordan in the choir that comprises residents from the Philippines, India, France, Italy, America, Netherlands, Armenia and Indonesia

The choir will be accompanied by a brass ensemble and an organ

They will practice for the first time at the stadium on the eve of the public mass on Monday evening 

Thank You for Banking with Us

Director: Laila Abbas

Starring: Yasmine Al Massri, Clara Khoury, Kamel El Basha, Ashraf Barhoum

Rating: 4/5

Updated: August 17, 2022, 6:56 AM`