A Lebanese Finance Ministry survey showed on Monday over half of ordinary people cannot afford to save money while two thirds face difficulties securing food and other necessities amid rocketing inflation during first nine months of 2012.
“More than 55% of Lebanese do not have any monthly income surplus and over 63% face difficulties in providing for foodstuff and necessities,” the report published in the October newsletter of the Lebanese Institute of Finance said.
In an interview with leading Lebanese newspaper The Daily Star, economist Marwan Iskandar warned the lack of savings has a dire direct impact on the economy.
“This is an indicator that growth will decline even further. The figures are indicative of declining disposable income and purchasing power,” he said.
“The decline in savings directly translates into a decline in investments, which also hinders the economy’s ability to grow,” Iskandar added.
The Lebanese economist said the figures reveal the government’s inability to increase taxation. “People are on the brink and cannot at all afford additional taxation,” he said.
Income level in Lebanon remains low despite government’s wage hike in February.
“Earnings in Lebanon remain very low and prices keep increasing. Moreover, the average citizen pays double utility bills,” Iskandar said.
“The cost of fuel, electricity and telecoms as well as health and education are among the highest in the world,” he added.
Ghazi Wazni, another leading economist concurred with Iskandar’s views and said that lack of savings is a direct result of soaring inflation rates and little or no increase in salaries.
“Around 30% of Lebanese earn bellow LL1.2 million ($800), not enough even for basic needs,” he told the Daily Star while insisting that the government should go forward with plans for public sector raises despite the costs to the treasury and furious opposition by private sector groups.
The survey, which also measured knowledge of financial issues across the country, also revealed that 50% of Lebanese citizens do not budget their household income and expenditures and had no exact knowledge of their weekly expenditures. Over 70% have no exact knowledge of their weekly income, the report added.
Meanwhile, the Consumer Price Index issued by the Central Administration of Statistics disclosed that inflation soared 10.3% by September 2012 compared to same period last year.
Housing prices in Lebanon, accounting for a significant 16.2% of the index’s weight, increased over 44% during the first nine months of 2012 while alcoholic beverages and tobacco products came second, soaring over 19% in the same period. Water, electricity and fuel gained 7.1% as education costs rose 7.5%, the report added.
The only respite came in shape of a 2.1% decline in health costs.
Many experts are warning that the Lebanese economy could witness negative growth in 2012 as a result of weaker performance in most indicators.