Lebanon’s Economy Ministry raised the price of subsidized bread for the fifth time in a year amid the worsening economic and financial crisis in the small country
BEIRUT – The Lebanese Ministry of Economy on Tuesday raised the price of subsidized bread for the fifth time in a year as the country’s multiple crises worsen without any resolution in sight.
The ministry said the reason for the latest increase – an 18% hike from the last increase in February – was the end of sugar subsidies by the central bank, which in turn raises the cost of producing bread.
Lebanon is grappling with the worst economic and financial crisis in its modern history – a crisis that the World Bank says is likely to be among the worst the world has seen in the past 150 years. The currency lost 90% of its value, breaking a lower record earlier this month of 15,500 Lebanese pounds per dollar on the black market. The official exchange rate remains 1,507 pounds to the dollar.
The World Bank said in a report this month that Lebanon’s gross domestic product is expected to contract 9.5% in 2021, after declining 20.3% in 2020 and 6.7% the year before. .
The central bank has cut funding for imports in subsidized dollars, as foreign exchange reserves have fallen dangerously from $ 30 billion at the start of the crisis in late 2019 to nearly $ 15 billion today. This prompted traders to raise prices or stop imports.
Most Lebanese have seen their purchasing power plummet and their savings evaporate, and more than half of the population of this small country now lives below the poverty line.
In June of last year, the government increased the price of flatbread, a staple in Lebanon, by more than 30%, for the first time in ten years. It has since raised the price three times before Tuesday.
The Ministry of the Economy says 910 grams (2 pounds) of bread will be sold for 3,250 pounds. It was sold for 2,750 pounds before the last increase.
Lebanon is experiencing severe shortages of gasoline, medicine – both still subsidized by the state – and other vital commodities. Power cuts last much of the day, and people queue for hours to refuel their cars. Shootings and fights broke out at gas stations, leaving several injured.
One of the reasons for the gasoline shortage is smuggling to neighboring Syria, which is struggling with its own gasoline shortage but is priced almost five times that of Lebanon.
A representative of the fuel distributors, Fadi Abu Shakra, said 140 gas station owners refused to receive gasoline on Tuesday due to the problems they face, including threats, blackmail and beatings.
“They cannot protect themselves,” he said, and called on security forces to protect gas stations, according to the national news agency.