Food prices in Lebanon spike by 55 pct as locals struggle to feed families: Report
Food prices have been on the rise in Lebanon, and an increasing number of Lebanese are struggling to provide for their families, and some are foregoing other expenses like necessary medication to put food on the table. With compounding crises, there seems to be no end in sight for the country’s struggles.
On average, food prices have risen by 55 percent in Lebanon since April 2019, a recent policy paper by Lebanese think tank Triangle found. Imported food prices, which must be purchased with the country’s dwindling foreign currency reserves, have seen more significant increases. Already at the end of 2019, importers warned of food shortages if the situation did not improve. So far, however, there are no shortages of basic goods.
“Now COVID-19 restrictions have widened the gulf between family incomes and food prices by slashing work hours even further, while the economy shows no signs of recovery,” the paper said.
In 2007 and 2008, food prices increased by around 18 percent, but at that time there was economic growth in the country, Sami Halabi, director at Triangle and one of the authors of the paper told Al Arabiya Englsih.
Today, that is not the case as the country’s economic situation continues to spiral and the coronavirus pandemic and accompanying lockdowns have put undue stress on a large segment of the population.
Now the middle class is being pushed below the poverty line as well, Halabi said.
“The immediate situation is worse [than in 2007], and the prognosis is also worse,” Halabi said. “And there’s no end in sight, because the government doesn’t really have a plan, other than the one they just unveiled to the IMF, which seems to be quite out of touch with reality.”
The country defaulted on its Eurobond payments in March, which triggered discussion with the International Monetary Fund to restructure the country’s massive debt. After the government approved an economic reform plan, official talks with the IMF kicked off this week.
On Friday, the Lebanese central bank said it will aim to provide dollars for importers at an exchange rate of 3,200 Lebanese lira to the US dollar. The pegged rate remains 1,507 lira to the dollar, but inflation in recent months has seen the peg slip, and on the street, the local currency now trades at a rate of more than 4,000 lira to the dollar.
“Banque du Liban will continue to inject dollar banknotes that it acquires via the banks with the aim of financing imports at the price of 3,200 Lebanese pounds per US dollar with the aim of reducing the price of food products,” the central bank said in a statement, Reuters reported.
Halabi said the central bank’s recent measure will help some, but the currency will continue to devalue.
“At the end of the day, there needs to be an emergency food security policy,” he said.
No shortages yet
While there are no shortages yet, though some high-end imports have disappeared from supermarket shelves, it has become harder for the average Lebanese family to purchase necessities.
At the same time last year, those below the extreme poverty line in Lebanon needed to spend around half their income on food, deemed by international aid organization as enough to survive. Today, to buy the same amount, those families must use 79 percent of their income, Triangle found. Forty-five percent of the population lives below the poverty line, and 22 percent lives below the extreme poverty line.
Triangle’s analysis found that the price of garlic has increased 95 percent, broad beans have shot up 70 percent, and rice has gone up 88 percent. Those import-dependent products have seen higher price hikes than some local products, such as salt, which has increased in price by 29 percent, and onions which have gone up 32 percent.
Lebanon is currently dependent on imports for between 65-80 percent of its food supply, and because of poor local infrastructure and weak bargaining positions farmers have against wholesalers and retailers, locally produced food is “neither particularly abundant nor cheap, with imported foods often being more affordable,” the paper’s authors wrote.
As Lebanon’s crisis continues to deepen, and concerns that any IMF program will come at a high cost, with more austerity measures imposed on Lebanese that could most severely hurt those at the bottom of society, hunger could continue to rise in the coming months. Protesters in the northern city of Tripoli, one of the poorest cities in the country, recently reclaimed the streets, burning banks, as hunger and unemployment fuel discontent.
“The government needs to get serious very quickly,” Halabi said. “Otherwise they’re going to have a huge security problem on their hands.”