| 24 May 2024, Friday |

The price hikes led to an 80% drop in consumption

The Lebanese have lost more than 90 percent of their purchasing power, leading to an automatic drop in consumption. Citizens’ salaries have become insufficient to pay the power generator bills only or to fill their car tanks with two gasoline cannisters.

How much did consumption rates drop?

In light of the deteriorating situation and the collapse in currency, along with the government’s failure to correct wages to keep pace with inflation, the volume of consumption declined by 80 percent. Consumption has been limited to basic needs only, the first of which is food that have also experienced a drop and some foodstuff has been replaced by lower quality, followed by fuel and luxuries such as clothing, furniture, electronics and others.

This reality has reduced the import bill by more than half, along with the demand for fresh dollars, which somehow contributed to the stability of the dollar exchange rate against the lira at about 20,000 LBP.

In details, the consumption of food and consumer goods declined by 70 to 80 percent compared to 2018, said Nabil Fahd, Head of the Supermarket Owners Syndicate, to Sawt Beirut International (SBI). He added that the imports of foodstuff have witnessed further drop, because the local products have replaced the imported ones. Fahed added that a large number of small and medium-sized companies importing foodstuffs and consumer goods stopped working as a result of the decline in consumption in such large proportions.

As for fuels, and after the price of a gasoline cannister have rose from 25,000 LBP to more than 300,000 LBP, its consumption has shrunk between 30 to 50 percent, and the daily market need for gasoline decreased from 10 million liters to about 6 million. Citizens have replaced cars with motorcycles and bicycles, and reduced their movements, which reflected a noticeable decline in traffic jam.

The consumption of luxury products have dropped between 30 and 60 percent. Consumption of electrical household appliances, have fell by 67 percent, alcoholic beverages by 59 percent, toys 53 percent, clothes 48 percent, watches and jewelry 58 percent, and shoes 57 percent.

Bahrain bans Lebanese imports, and 300 containers are stuck in the Saudi port

After Saudi Arabia, Bahrain also banned Lebanese imports without officially announcing this. The international shipping and delivery company “DHL” has also suspended operations between the two countries.

FedEx has also followed suit, as it suspended incoming and outgoing shipments between Lebanon and Saudi Arabia and between Lebanon and Bahrain, except for packages carrying documents.

In this context, Yahya Kasaa, Head of the Lebanese Franchise Association, revealed that the export situation is getting worse, especially since a third of Lebanese exports heads to the Gulf countries. He pointed out that around 300 containers exported from Lebanon, are still stuck in the Saudi port due to the Captagon crisis.”

  • Sawt Beirut International