BEIRUT, Aug 26 (Reuters) – Lebanon’s inflation rate soared to 112.4% year-on-year in July amid an economic meltdown, latest official data showed, even before this month’s devastating Beirut port explosion compounded a deep financial crisis.
Lebanon became the first country in the region to suffer from hyperinflation in July, according to Steve H. Hanke, Professor of Applied Economics at the Johns Hopkins University.
Inflation in Lebanon, whose plight worsened since defaulting on its sovereign debt in March, had risen 89.74% year-on-year in June and 56.53% year-on-year in May, figures from the government statistics department showed.
The consumer price index rose 11.42% in July compared to the previous month.
An official Lebanese source said last week that the central bank could only subsidise fuel, wheat and medicine for three months, as critically low foreign currency reserves dwindle.
Banque du Liban governor Riad Salameh said in remarks on Tuesday that the central bank cannot use its obligatory reserve to finance trade once it reaches its minimum threshold.
Talks with the International Monetary Fund for a bailout have stalled over inaction on long-demanded reforms to tackle entrenched corruption and mismanagement and an internal row over the size of vast financial losses. (Reporting by Ellen Francis and Ghaida Ghantous; Editing by Aurora Ellis)
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