for the first time
Decline in oil prices main driver
A 3.4 percent deflation was registered in 2015, for the first time in the post-war era. The Consumer Price Index (CPI) dropped to 95.92 in December from 99.29 in the same month of 2014, mainly due to lower fuel and transportation costs resulting from lower oil prices.
Prices of the water, electricity, gas and other fuels category plunged by 18 percent over the period, according to the Central Administration of Statistics (CAS). This category, which has a weight of nearly 12 percent in the index, achieved the biggest drop among all sub-indices. The second largest drop was 7.7 percent and was in the category of transportation, which is also dependent on oil prices. Its weight is 13 percent.
The food and non-alcoholic beverages category, with a weight of about 21 percent, dropped 0.6 percent, according to CAS.
Healthcare costs fell 7.2 percent over the period. Economist Kamal Hamdan said this drop was due to measures taken by the Ministry of Health, notably reducing the prices of a number of drugs. Sleiman Haroun, Chairman of the Syndicate of Private Hospitals said that there was no significant change in the cost of hospitalization in private sector hospitals.
Nabil Fahed, Chairman of the Syndicate of Supermarket Owners and Vice Chairman of the Chamber of Commerce of Beirut and Mount Lebanon, said that the drop in CPI resulted from the recession and the decline in demand. He said that the savings made due to falling oil prices did not lead to an increase in spending on consumer goods.
The categories that experienced a price increase over the year mainly included new rents and education, which rose by about 1.5 percent each and restaurant and hotel services, which increased by 1.4 percent.
Date Posted: Jan 28, 2016