Lebanon is expected to post the second-highest inflation rate in the world this year, trailing only Sudan, according to Fitch Solutions.
Inflation in the country, which faces its worst economic crisis in more than three decades, will average 178 per cent in 2022, up from about 155 per cent last year, Fitch said.
This is an upward revision from Fitch's previous forecast of about 156 per cent for this year due to stronger inflationary pressures from the adjustment of telecommunications, port and customs tariffs, it said.
Inflation in the country will drop to 60 per cent in 2023 as the effects from the removal of subsidies will fade, Fitch said.
Runaway inflation in Lebanon rose to 210 per cent in June from the same month a year earlier, marking the 24th consecutive triple-digit increase of the Central Administration of Statistics' Consumer Price Index since July 2020. The index increased 9.23 per cent from May 2022.
While Inflation in the country continues unabated, it remains far from its peak of 741 per cent towards the end of 1987, during the civil war in the country from 1975 to 1990.
Inflation will be fuelled by high global commodities and oil prices, the continued depreciation of the Lebanese pound on the parallel market and on Sayrafa, the electronic trading platform regulated by Banque du Liban (BDL).
"We believe that the gradual adoption of the Sayrafa exchange rate that BDL sets daily, which currently stands at 26,100 Lebanese pounds to the US dollar, instead of the official exchange rate of 1,507.5 pounds to the dollar, across several sectors will feed through higher inflationary pressures," Fitch said.
The Sayrafa exchange rate, which was adopted for telecommunications tariffs from July 1 and for port fees from August 1, 2022 will lead to "a significant increase" in phone and internet bills as well as in the cost of imported goods through the port, it said.
Fitch expects Lebanon's parliament to approve an adjustment to customs tariffs, which will push up the cost of imported non-essential goods, such as tobacco and alcohol, contributing to higher inflation.
It also expects Lebanese authorities to start reducing bread subsidies after the removal of the majority of subsidies on basic goods in 2021, which will lead to higher prices.
"The surge in wheat prices following Russia’s invasion of Ukraine along with BDL’s eroding foreign currency reserves will make it more challenging for the government to subsidise bread prices," Fitch said.
"In fact, the gradual increase in subsidised bread prices, which accelerated due to the supply tightness in the global and domestic wheat market since Russia’s invasion of Ukraine, led to the increase in bread prices to more than 30,000 Lebanese pounds in August from around 14,000 Lebanese pounds in March 2022. We foresee the upward trend in bread prices will continue, adding to the inflationary pressures."
Lebanon's economy collapsed after it defaulted on about $31 billion of Eurobonds in March 2020, with its currency sinking more than 90 per cent against the dollar on the black market.
The country's public debt ballooned to more than $100bn, or about 212 per cent of gross domestic product, in 2021.
Lebanon has the fourth-highest debt-to-GDP ratio in the world, surpassed only by Japan, Sudan and Greece, according to the World Bank.
The country's economy contracted about 58 per cent between 2019 and 2021, with GDP falling to $21.8bn in 2021, from about $52bn in 2019, according to the World Bank — the largest contraction on a list of 193 countries.
Fitch also warned that "a sharp spike in political risk due to heightened tensions with Israel over maritime borders dispute and/or in the run-up to the presidential elections could lead to more pronounced depreciation of the Lebanese pound on the parallel market".
Lebanon's political elite must agree on a new president by October 31, when Michel Aoun's six-year term expires.
Lebanon has historically been marred by political impasses that have created political vacuums. Politicians have yet to form a government three months after parliamentary elections were held, delaying the implementation of reforms that are a prerequisite to securing $3 billion from the International Monetary Fund.
Political wrangling left the country without a president for two and a half years until Mr Aoun's election by the 128-seat parliament in 2016. His predecessor, Michael Sleiman, was elected in 2008 after the position had been vacant for 18 months.
MATCH INFO
Champions League quarter-final, first leg
Ajax v Juventus, Wednesday, 11pm (UAE)
Match on BeIN Sports
Civil%20War
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'C'mon C'mon'
Director:Mike Mills
Stars:Joaquin Phoenix, Gaby Hoffmann, Woody Norman
Rating: 4/5
Key products and UAE prices
iPhone XS
With a 5.8-inch screen, it will be an advance version of the iPhone X. It will be dual sim and comes with better battery life, a faster processor and better camera. A new gold colour will be available.
Price: Dh4,229
iPhone XS Max
It is expected to be a grander version of the iPhone X with a 6.5-inch screen; an inch bigger than the screen of the iPhone 8 Plus.
Price: Dh4,649
iPhone XR
A low-cost version of the iPhone X with a 6.1-inch screen, it is expected to attract mass attention. According to industry experts, it is likely to have aluminium edges instead of stainless steel.
Price: Dh3,179
Apple Watch Series 4
More comprehensive health device with edge-to-edge displays that are more than 30 per cent bigger than displays on current models.
Benefits of first-time home buyers' scheme
- Priority access to new homes from participating developers
- Discounts on sales price of off-plan units
- Flexible payment plans from developers
- Mortgages with better interest rates, faster approval times and reduced fees
- DLD registration fee can be paid through banks or credit cards at zero interest rates
The Sand Castle
Director: Matty Brown
Stars: Nadine Labaki, Ziad Bakri, Zain Al Rafeea, Riman Al Rafeea
Rating: 2.5/5
The%20specs
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RESULTS
5pm: Maiden (PA) Dh80,000 1,600m
Winner: Omania, Saif Al Balushi (jockey), Ibrahim Al Hadhrami (trainer)
5.30pm: Conditions (PA) Dh85,000 1,600m
Winner: Brehaan, Richard Mullen, Ana Mendez
6pm: Handicap (TB) Dh100,000 1,600m
Winner: Craving, Connor Beasley, Simon Crisford
6.30pm: The President’s Cup Prep (PA) Dh100,000 2,200m
Winner: Rmmas, Tadhg O’Shea, Jean de Roualle
7pm: Wathba Stallions Cup (PA) Dh70,000 1,200m
Winner: Dahess D’Arabie, Connor Beasley, Helal Al Alawi
7.30pm: Handicap (PA) Dh80,000 1,400m
Winner: Fertile De Croate, Sam Hitchcott, Ibrahim Aseel
Profile
Company: Justmop.com
Date started: December 2015
Founders: Kerem Kuyucu and Cagatay Ozcan
Sector: Technology and home services
Based: Jumeirah Lake Towers, Dubai
Size: 55 employees and 100,000 cleaning requests a month
Funding: The company’s investors include Collective Spark, Faith Capital Holding, Oak Capital, VentureFriends, and 500 Startups.
Killing of Qassem Suleimani
MATCH INFO
AC Milan v Inter, Sunday, 6pm (UAE), match live on BeIN Sports
Quick facts on cancer
- Cancer is the second-leading cause of death worldwide, after cardiovascular diseases
- About one in five men and one in six women will develop cancer in their lifetime
- By 2040, global cancer cases are on track to reach 30 million
- 70 per cent of cancer deaths occur in low and middle-income countries
- This rate is expected to increase to 75 per cent by 2030
- At least one third of common cancers are preventable
- Genetic mutations play a role in 5 per cent to 10 per cent of cancers
- Up to 3.7 million lives could be saved annually by implementing the right health
strategies
- The total annual economic cost of cancer is $1.16 trillion
UAE currency: the story behind the money in your pockets
EXPATS
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'Brazen'
Director: Monika Mitchell
Starring: Alyssa Milano, Sam Page, Colleen Wheeler
Rating: 3/5
FA CUP FINAL
Manchester City 6
(D Silva 26', Sterling 38', 81', 87', De Bruyne 61', Jesus 68')
Watford 0
Man of the match: Bernardo Silva (Manchester City)
Masters%20of%20the%20Air
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The White Lotus: Season three
Creator: Mike White
Starring: Walton Goggins, Jason Isaacs, Natasha Rothwell
Rating: 4.5/5
More from Rashmee Roshan Lall
more from Janine di Giovanni
Specs
Engine: Dual-motor all-wheel-drive electric
Range: Up to 610km
Power: 905hp
Torque: 985Nm
Price: From Dh439,000
Available: Now
What can victims do?
Always use only regulated platforms
Stop all transactions and communication on suspicion
Save all evidence (screenshots, chat logs, transaction IDs)
Report to local authorities
Warn others to prevent further harm
Courtesy: Crystal Intelligence
Profile of RentSher
Started: October 2015 in India, November 2016 in UAE
Founders: Harsh Dhand; Vaibhav and Purvashi Doshi
Based: Bangalore, India and Dubai, UAE
Sector: Online rental marketplace
Size: 40 employees
Investment: $2 million
The specs
Engine: 2.0-litre four-cylinder turbo
Power: 268hp at 5,600rpm
Torque: 380Nm at 4,800rpm
Transmission: CVT auto
Fuel consumption: 9.5L/100km
On sale: now
Price: from Dh195,000
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
Tax authority targets shisha levy evasion
The Federal Tax Authority will track shisha imports with electronic markers to protect customers and ensure levies have been paid.
Khalid Ali Al Bustani, director of the tax authority, on Sunday said the move is to "prevent tax evasion and support the authority’s tax collection efforts".
The scheme’s first phase, which came into effect on 1st January, 2019, covers all types of imported and domestically produced and distributed cigarettes. As of May 1, importing any type of cigarettes without the digital marks will be prohibited.
He said the latest phase will see imported and locally produced shisha tobacco tracked by the final quarter of this year.
"The FTA also maintains ongoing communication with concerned companies, to help them adapt their systems to meet our requirements and coordinate between all parties involved," he said.
As with cigarettes, shisha was hit with a 100 per cent tax in October 2017, though manufacturers and cafes absorbed some of the costs to prevent prices doubling.
The specs
Engine: 3.0-litre six-cylinder turbo
Power: 398hp from 5,250rpm
Torque: 580Nm at 1,900-4,800rpm
Transmission: Eight-speed auto
Fuel economy, combined: 6.5L/100km
On sale: December
Price: From Dh330,000 (estimate)
COMPANY%20PROFILE
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The specs
Engine: 1.5-litre turbo
Power: 181hp
Torque: 230Nm
Transmission: 6-speed automatic
Starting price: Dh79,000
On sale: Now
Labour dispute
The insured employee may still file an ILOE claim even if a labour dispute is ongoing post termination, but the insurer may suspend or reject payment, until the courts resolve the dispute, especially if the reason for termination is contested. The outcome of the labour court proceedings can directly affect eligibility.
- Abdullah Ishnaneh, Partner, BSA Law
