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Lebanon’s Living Costs Soar over Dollar Crisis

Lebanon’s Living Costs Soar over Dollar Crisis

Saturday, 22 February, 2020 - 08:30
Lebanese bakeries could stop work on Monday amid crisis in dollars (NNA)
Beirut - Asharq Al-Awsat

The Union of Bakery Owners in Lebanon has announced an open-ended strike as of next Monday to avoid raising the price of bread.

The problem of bakeries is caused by a dollar liquidity crunch and the devaluation of the Lebanese pound.

Bakeries charge consumers in Lebanese pounds, while they must pay for wheat and flour in US dollars.

“There’s a great burden. We have to pay in dollars and in cash for the maintenance of our equipment, in addition to taxes for the public administration,” said head of the Union of Bakeries, Kazem Ibrahim.

“The problem is related to the cost of all the ingredients of bread-making, in addition to the taxes that are paid fully in dollars,” he said.

The price of a bag of bread has so far remained the same at 1,500 Lebanese pounds. But the union called on the authorities to keep the subsidy on wheat in order not to raise the price of bread.

The warning of bakeries came as the Consumer Protection Association revealed a 45 percent rise in inflation.

“We are at the heart of the collapse,” the watchdog said in a press release on Friday.

Also Friday, Lebanon’s Consumer Protection Association revealed that prices have shockingly risen by 45.16 percent between Oct. 1, 2019 and Feb. 15, 2020 while wages have dropped over the same period.

“The purchasing power of Lebanese is falling rapidly. The monthly minimum wage fell from $450 to about $267,” the watchdog said, adding that 40 percent of the Lebanese people currently live under the poverty line.

It said people’s savings would evaporate in a few short weeks while merchants would have fewer products. “This would lead to further increases in the prices of goods.”

The announcement came as the dollar exchange rate of the Lebanese black market has reached 2,500 pounds for one dollar, while the official dollar exchange rate at the Central Bank remains at 1,515 pounds.

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