Lebanon Businessnews News

Who let inflation out?
Merchants say prices’ increase is a direct effect of global rise in prices; Consumer Protection blames inflation on lack of government control
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July 8, 2011- “The prices of some food commodities grew between 10 and 50 percent this year”, said Head of the Supermarket Owners’ Syndicate, Nabil Fahed. Merchants say the increase in prices is a direct effect of the global rise in prices, while the Consumer Protection Association blames the rise on merchandise cartels and lack of government control, according to An-Nahar report published Friday (July 8).

Fahed told the daily that the inflation is attributed to the worldwide increase of the prices of several food items. He said high prices were triggered by the global increase in oil prices and a 10 percent increase of the Euro.
According to Fahed, prices of oil, milk, coffee beans, cacao, canned foods, and dairy products have increased between 10 and 50 percent.

The inflation rate is estimated at 4.4 percent, Fahed said, “which is an acceptable rate compared to other countries.”
Figures released by the Central Administration for Statistics show that the Consumer Price Index rose to 116.2 in May 2011, a yearly increase of 5.6 percent from 110 in May 2010.

Central Bank Governor Riad Salameh predicted that inflation this year would reach up to 7 percent. He said the Central Bank intends to curb the rising inflation through managing liquidity rather than raising interest rates. Consumer price inflation was below 5 percent in 2010.

Head of the Consumer Protection Association, Zouhair Berro, refuted assumptions that the inflation is triggered by external factors. Talking to An-Nahar, Berro blamed the prices’ surge on the “absence of State control and the monopoly exercised by merchants”.

He said the state should take a number of measures to control inflation rates. The government should activate the roles of the National Councils for Consumer Protection and for Food Safety, in pricing policies, he said. Estimating that Lebanon imports 80 percent of its consumption, Berro called for a law to regulate competition and curb monopoly.
According to Berro, prices of meat products rose by 30 percent in the past few months, despite them having dropped globally, which, he said, suggests that local prices’ increase is not fully attributable to the global scale.

Date Posted: Jul 08, 2011
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