BEIRUT (AP) — Lebanon’s caretaker government raised the price of subsidised bread and flour on Monday for the fourth time in less than a year amid a crippling economic crisis.
Lebanon was grappling with the worst economic crisis in its history even before the public health crisis caused by the pandemic. The government defaulted on its foreign debt last year amid growing public debt, dwindling revenues and foreign currency.
Banks closed their doors for two weeks and restricted transfers and withdrawals as nationwide protests spread and the local currency tumbled.
Pegged to the dollar for nearly 30 years, the Lebanese pound has now lost 80 per cent of its value as a black market thrives. Unemployment worsened, inflation soared and nearly half of the population is now living below the poverty line.
Repeated lockdowns and restrictions because of surge in coronavirus cases has added to the hardship.
In a sign of the deepening crisis, the government in June raised the price of flatbread, a staple in Lebanon, for the first time in a decade by more than 30 per cent.
It has since raised the price twice before Monday. Economy Minister Raoul Nehme said on Monday the price of a bag of flatbread would be revisited if the local currency gains strength in the face of the dollar or if the price of wheat worldwide decreases.
For now, Nehme said a small bag of flatbread will sell at LBP1,750, up from LBP1,250. The weight of the bag would increase by 50 grammes.
The owner of a well-known nationwide bakery, Assaad Bou Habib, said he expects yet another price hike soon as the government’s foreign reserves dwindle.
He said his business, Wooden Bakery, is surviving only because of franchises it has elsewhere in the region.
“If we didn’t have branches abroad, our situation in Lebanon would have been catastrophic,” Bou Habib said.