Lebanon inflation falls to 14% as exchange rate stabilises

Monthly inflation less than 1%

IMF points to central bank actions

Lebanon’s annual inflation rate fell to 14 percent in March, from 70 percent in the same month last year, according to news reports.

The primary cause of the drop is the stabilisation of the country’s exchange rate, Arab News reported, citing data from the Central Administration of Statistics in Beirut. The rate has stood at roughly 89,500 Lebanese pounds to the dollar since mid-2023.

Prices were also exceptionally high in March 2024, contributing to the drop.

Monthly prices rose by 0.44 percent in March, a minor increase for Lebanon. The primary causes were rising prices for clothing, housing and utilities, and food and beverages.

An International Monetary Fund report published in March highlighted that recent policies had helped to maintain some economic stability in Lebanon. 

“Inflation declined and the exchange rate stabilised following the elimination of the fiscal deficit since mid-2023, supported by the central bank’s ending monetary financing and foreign exchange subsidies,” the IMF wrote in its report.

However, it added that “ongoing economic, financial and social challenges” need to be addressed.

Dr Nasser Saidi, a former Lebanese economy minister and an AGBI columnist, wrote in January that “credible monetary reform requires a strong, professional and politically independent central bank. 

“Monetary policy should be directed at controlling inflation and accompanied by a flexible exchange rate regime. Additionally, a comprehensive overhaul of Banque du Liban’s governance structure is necessary to implement meaningful change and restore confidence,” Saidi wrote.

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