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BEIRUT: Lebanon’s annual inflation rate eased to 14.2 percent in March, down from 70.36 percent a year earlier, according to the latest data from the country’s Central Administration of Statistics.

A key factor behind easing inflation is the stabilization of the exchange rate, with the Lebanese pound holding steady at around 89,500 Lebanese pounds per US dollar since mid-2023.

According to the International Monetary Fund’s March staff report on Lebanon, this stabilization has been supported by the halt of monetary financing and foreign exchange subsidies, as well as improvements in fiscal revenue collection.

Concurrently, monetary tightening by the central bank has played a critical role. The volume of Lebanese pounds in circulation dropped sharply from $20.51 billion in 2020 to $0.73 billion in 2024, significantly dampening inflationary pressures, as noted in a 2024 analysis by Blominvest.

Dollarization has also accelerated across key sectors such as healthcare, education, and telecommunications, where services are increasingly billed in US dollars.

This shift has helped anchor price stability in dollarized segments of the economy, further moderating consumer price volatility, according to a 2024 article by Bloomberg.

A strong base effect also contributed to the lower year-on-year inflation reading, as March 2024 had recorded exceptionally high price levels, making current figures appear relatively subdued.

Despite the recent moderation, Lebanon’s underlying economic conditions remain fragile. The expanding dollarization trend has also deepened inequality, disproportionately impacting households and workers who continue to be paid in the domestic currency.

On a monthly basis, consumer prices rose by 0.44 percent in March, a modest uptick by Lebanon’s recent standards. The increase was driven mainly by higher costs in food and beverages, housing and utilities, and clothing and footwear.

However, the magnitude of monthly price changes has notably cooled compared to previous years, when double-digit jumps were not uncommon.

Regionally, inflation trends varied across governorates. The north of Lebanon recorded the highest monthly inflation at 1.41 percent, driven primarily by food and non-alcoholic beverage prices, which rose 3.8 percent month-on-month.

The Nabatieh region followed with a monthly rise of 0.81 percent, while Mount Lebanon posted the lowest increase at 0.11 percent and Beirut at 0.33 percent.

This divergence highlights the continued impact of geographic and income disparities on exposure to inflation.

Lebanon’s consumer price index is calculated by CAS using a representative basket of goods and services based on 2013 consumption patterns. The CPI remains the country’s most widely cited benchmark for tracking the cost of living.

WASHINGTON: The International Monetary Fund must be more active in debt restructuring processes, the global lender’s managing director, Kristalina Georgieva, said on Tuesday, noting the growing challenges facing vulnerable low- and middle-income countries.

Georgieva told an event hosted by the Bretton Woods Committee booster group that African countries and others, in a 1-1/2-hour meeting, said they wanted the IMF to provide more technical assistance to countries grappling with high debt levels.

She said the Global Sovereign Debt Roundtable, which includes creditor and borrowing countries as well as the IMF and the World Bank, had separately approved a new playbook to help countries navigate the complex process of restructuring heavy debt burdens.

The roundtable will release the document after a closed-door meeting in Washington on Wednesday during the spring meetings of the IMF and the World Bank.

A joint statement released by Georgieva and Hervé Ndoba, chair of the African Caucus and Central African Republic’s minister of finance and budget, said Africa faces the risk of further shocks that could undo strong policy actions taken to bring down inflation, stabilize public debt and reduce external imbalances.

“While growth in Africa is showing some resilience in the face of multiple shocks, the sudden shift in the global outlook has interrupted the growth momentum,” the two leaders said, noting that growth on the African continent had been revised down by 0.3 percentage point to 3.9 percent for 2025.

African leaders and the IMF agreed on the need to ensure macroeconomic and financial stability while working to meet the continent’s economic development goals. They said domestic reform efforts should promote fiscal sustainability by boosting revenue and improving spending efficiency.

“Now, more than ever, the Fund is committed to working with its member countries to help navigate the complex global economic environment,” the joint statement said, noting that addition of a 25th chair on the Executive Board for sub-Saharan Africa strengthened the region’s voice in the fund.

The statement also pledged that the IMF would “remain agile” in responding to emerging challenges, and providing support to initiatives like the G20 Common Framework and the Global Sovereign Debt Roundtable.

It welcomed IMF steps to review both its debt sustainability framework for low-income countries and the design and conditionality of lending programs with an eye to addressing macroeconomic imbalances and promoting growth.

The African Consultative Group includes governors from 12 African countries belonging to the African Caucus and IMF management.