On Tuesday, Lebanon’s economy ministry elevated the price of funded bread for the fifth time in a year, as the country’s financial crises deteriorate with no resolution in sight.
The ministry alleged the cause after the latest increase, which recorded an 18% climb from the last increase in February, was due to the Lebanese Central Bank’s conclusion of sugar subsidies, which in turn enhanced the cost of bread production.
Lebanon is contending with the cruelest economic and financial crisis in its modern history, one that the World Bank has said is likely to rank as one of the vilest the world has seen in the past 150 years. The currency has lost 90 percent of its value, breaking a record low earlier this month of 15,500 Lebanese pounds to the dollar on the black market. The official exchange rate remains at 1,507 pounds to the dollar.
The World Bank said in a report this month that Lebanon’s gross domestic product (GDP) is projected to contract 9.5 percent in 2021, after shrinking by 20.3 percent in 2020 and 6.7 percent the year before.
The Central Bank has been dropping down on financing imports at subsidized dollars, as foreign currency reserves have dropped dangerously low to nearly $15 billion from $30 billion at the start of the crisis in late 2019. This has prompted merchants to either raise prices or stop imports.