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Since March, Lebanese citizens have witnessed the adoption of dollar prices in supermarkets. This initially caused outrage among consumers given the prevailing hyperinflation in the country. However, three months into the decision, consumer prices turned out to have decreased by 7.3%.
Nabil Fahed, the head of the Syndicate of Supermarket Owners in Lebanon, told This Is Beirut that consumer goods prices have decreased by 7.3% between January 2023 and March 2023, due to the dollarization step. Fifty essential household products, he added, have recently shown price stability.
“To analyze the impact of dollarization, the household basket has been compared before and after the shift to dollars, which showed an average decrease of 7% for the same products priced in dollars,” Fahed said.
He stated that while certain products have experienced a 5% price decrease, others have experienced a 10% decrease, and yet others have remained unchanged. He stressed that the mentioned figures represent an average.
Asked about the reason behind this decrease, Fahed explained that “both product importers and local manufacturers had previously applied a higher margin to protect themselves from significant fluctuations in the exchange rate between the dollar and the national currency, as supermarkets have been settling their bills in Lebanese pounds. However, this margin is longer necessary with the dollarization.”
According to a study conducted by the Ministry of Economy, the prices of items included in the household basket have significantly dropped. For example, cheese prices have decreased by 5%, whereas canned goods have registered a 7% drop. A 1% decline in the prices of sunflower oil and butter was witnessed in late May, while the prices of chicken thighs dropped by 14%.
Head of the Syndicate of Food Importers in Lebanon Hani Bohsali, concurred, as he told This is Beirut that the shift toward dollar-based pricing has been a positive step that aimed at achieving “price stabilization and transparency.”
Bohsali observed a decrease or stabilization in the prices of staple food items in the wake of the dollarization step, following a temporary increase attributed to the Ukrainian crisis. These foods encompass products like vegetable oil, rice and sugar.
Regarding the statistics indicating a year-on-year inflation of 366% from March 2022 to March 2023, Bohsali emphasized the importance of a scientific approach. “We are aware that not all prices have increased by 366%. It is crucial to consider the context, conditions and volume under which each statistic was gathered, especially if the prices were in Lebanese pounds,” he added.
He explained that prices in dollars have not experienced an astronomical surge over the past two years (2021-2023). Instead, they fluctuated, increasing at times and decreasing at others, while some prices remained stable. For instance, the price of 5 kg of Egyptian rice remained steady at $4.5 from April 2021 to January 2023. However, its price in Lebanese pounds increased from 45,000 to 200,000 before eventually dropping to 180,000 in January 2023. Similarly, the price of 5 liters of sunflower oil increased to $17.5 following the outbreak of the Ukrainian war in April 2022, having previously been priced at $2.5. By January 2023, however, it had dropped below the $10 threshold.
Bohsali reiterated that the objective of dollarization is to ensure the security of food supplies and present prices that are deemed “fair.”