Lebanon Businessnews News

Inflation up by 0.6 percent
Prices drop in retail and transport sectors
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The Consumer Price Index (CPI), published by the Central Administration of Statistics (CAS), said inflation was up only by 0.6 percent at end-September 2013, compared to the same period last year. The CPI measures and tracks fluctuation in prices of a basket of goods over time.

The prices of education witnessed the highest increase, up by 14.6 percent. This was mainly due to an increase in teachers’ wages and the cost of school fees. Prices of tobacco and alcoholic beverages increased by 7.3 percent.

Prices of hotels and restaurants saw the third highest increase, up by 5.2 percent. Roger Saad, Director of Sales at the Four Seasons hotel, said this increase does not reflect a healthy or refreshed hospitality scene. Hotels business reservation revenues are usually parted into two categories: Rack rates coming from individual bookings, and corporate rates, coming from group bookings. “The prices increased because of growth in hotels’ rack rate reservations. We had no corporate booking for the last month, because of the US threatening Syria.” According to him, rack rates generate higher revenues because fares are not subject to discounts, unlike corporate rates. “Corporate rates guarantee higher occupancy, on the other hand.”

By contrast, the prices of clothing and footwear witnessed the greatest drop, down to 12.4 percent. They were followed by the prices of transportation dropping by 5.6 percent.

Nicolas Chammas, President of the Beirut Traders Association, said this figure was expected. The retail sector is currently in a deflation phase in which traders are obliged to offer discounts to survive. “Except for education and food, all business sectors are facing the same problem.” According to him, demand is low, but offer is still the same, except in the FMCG sector affected by the Syrian refugees. “Even though inflation was controlled overall, the commercial sectors were hit by a brutal recession.”

Housing and communication prices remained flat.
Reported by Rana Freifer
Date Posted: Oct 28, 2013
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