As political leaders in crisis-hit Lebanon bicker over positions in the yet-to-be-formed government, the country’s runaway inflation rate surged to 211% in May 2022, new data has shown. Economist Steve Hanke insists that a currency board is a solution to Lebanon’s currency woes.
The inflation rate in crisis-torn Lebanon surged to 211% in May, making it the 23rd consecutive time the consumer price index (CPI) has surged, a report has said. The revelation of the latest inflation figure comes as the country’s politicians reportedly struggle to form a new government more than a month after parliamentary elections.
The inability of the authorities to monitor and contain retail prices … as well as the fluctuation of the Lebanese pound’s exchange rate on the parallel market and the gradual lifting of subsidies on hydrocarbons, have encouraged opportunistic wholesalers and retailers to raise the prices of consumer goods disproportionately.
The National News report also asserts that Lebanon, whose public debt now exceeds $100 billion, needs to have a government in place in order for it to access a further $11 billion that was pledged by donors in 2018. Nevertheless, this funding only becomes available once the required reforms have been carried out.
“Since Jan 1st, 2020, the Lebanese pound has depreciated 92% against the USD. The Mikati government won’t stop Lebanon’s economic death spiral with a flawed deal with the IMF. The only way for Leb to establish confidence & stability is to install a Currency Board,” the economist argued.
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