---
title: "Food in Lebanon Is the Most Expensive Among the World's Countries | Ghazi Mahmoud"
url: https://ghazimahmoud.com/en/articles/2023-05-10-2e0ae4/
lang: en
description: "In the context of Lebanon's economic crisis and its financial and monetary repercussions since 2019, it is essential to examine the latest World Bank report (8 May 2023) on food security, in which Lebanon topped the list of countries with the highest inflation in domestic food prices."
---

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# Food in Lebanon Is the Most Expensive Among the World's Countries

[Brig. Gen. (Ret.) Dr. Ghazi Mahmoud](https://ghazimahmoud.com/en/about/)

10 May 2023 · 7 min read

[Banking and money](https://ghazimahmoud.com/en/articles/money/)[The world economy](https://ghazimahmoud.com/en/articles/world/)

In the context of Lebanon's economic crisis and its financial and monetary repercussions since 2019, it is essential to examine the latest World Bank report (8 May 2023) on food security, in which Lebanon topped the list of countries with the highest inflation in domestic food prices. Nominal food price inflation in Lebanon reached 352% (year on year), ahead of Venezuela by nearly 200 points, Argentina by more than 240 points, and Zimbabwe by 250 points. What explains this surge is perhaps the prolonged collapse of the national currency, which has lost more than 85% of its purchasing power. The statistics website "Numbeo.com" had ranked Beirut as the most expensive Arab city for the second consecutive year and 46th globally for 2023, after comparing price levels there and in other cities around the world with their counterparts in the US city of New York. The cost of living index in Beirut stood at 80.30 points, meaning that it is only 19.70% lower than in New York. On the 2023 quality of life index, also issued by the same website, Beirut ranked 240th out of 242 cities in the world, and last among the Arab cities included in the index, with a score of 56.80 points. This ranking comes at a time when the Lebanese are suffering from the collapse of their national currency and the decline in purchasing power among low-income earners, particularly public sector employees and other salaried workers, pointing to the worsening of the crisis-stricken economic reality endured by most segments of Lebanese society. This is especially noteworthy given that rising prices of goods and services, or inflation, usually accompany economic prosperity that drives higher demand, whereas price rises in Lebanon are intensifying alongside stagflation, without the productive sectors of the Lebanese economy having experienced the boom that usually precedes a recession, further compounding their crisis. Recently, most countries in the world have suffered from rising living costs and higher prices for goods and services, after the coronavirus pandemic caused an economic contraction that spared no country in the world. No sooner had the global economy begun to shed the burdens of the coronavirus and its economic fallout and regain its momentum than the Russia-Ukraine war broke out, hitting food prices because the two countries are a major source of wheat and other foodstuffs, while rising oil and gas prices also drove up transport costs, which in turn pushed up the cost of goods in general and food items in particular. Notably, this is not the first time Beirut has featured among the most expensive cities in the world: it ranked 63rd globally and 5th regionally on the list of the world's most expensive cities, which covered 143 cities worldwide and 15 cities across the region, according to a report by the Mercer Human Resource Consulting website in 2007. In the website's 2008 report, Beirut ranked 80th globally and 7th in the Middle East and North Africa region, before climbing to 41st globally and 7th regionally on the same index in the 2009 report. Returning to the 2023 cost of living index in the report by the statistics website Numbeo.com cited above, the cost of consumer goods in Beirut is higher than that prevailing over the same period in the cities of San Francisco and Oakland in the United States of America, and in Oslo, the capital of Norway, and is the highest among all Arab cities. Meanwhile, it is lower than consumer goods prices in Santa Barbara and New York City in the United States of America, and in Nassau, the capital of the Bahamas. According to this report, Beirut scored 91.40 points, meaning that consumer goods prices in Beirut are only 8.60% lower than those in New York City, 48.60 on the restaurant price index, meaning that restaurant prices in Beirut are 51.40% lower than in New York, and 10.10 on the purchasing power index, meaning that purchasing power in Beirut is 89.90% lower than purchasing power in New York. Regardless of Beirut's standing among the world's most expensive cities and as the costliest among Arab cities, the purchasing power index for Beirut cited above reflects the depth of the economic crisis afflicting the whole of Lebanon, not merely its capital, Beirut. This makes it necessary to examine the causes that have led, and continue to lead, to rising prices for goods and services, especially since higher domestic prices have failed to encourage production to meet domestic demand for goods, and have in fact deprived the national economy of opportunities to expand export-oriented productive investments. Among the causes of high prices is the system of monopolies and exclusive agencies and their protection, which has fuelled higher prices for imported goods, both consumer and intermediate, driving up the cost of Lebanese industrial production and rendering it unexportable and unable to compete with comparable imported goods. The agricultural sector is faring no better than industry: agrochemicals, seeds, and other agricultural inputs are subject to the monopoly system, which has raised production costs and pushed up the prices of its products. According to some estimates, monopolistic structures add a further 30 per cent to the cost of living in the Lebanese market. Fiscal and monetary policies since the early 1990s aimed at attracting deposits also contributed to a rapid rise in the price levels of goods and services, as high interest rates played a pivotal role in pushing up the prices of goods and services, particularly since interest represents the cost of capital alongside the other costs of producing goods or services. High interest rates prevented industrialists from securing suitable capital to expand their investments, while translating into further price increases for the products of those industrialists who did manage to borrow, eroding the competitiveness of their products in domestic and foreign markets. Pegging the national currency's exchange rate to the US dollar in the early 1990s likewise played its part in the appreciation of the real exchange rate of the Lebanese currency, at a time when the US dollar was falling against other world currencies and pushing up domestic prices. This encouraged the expansion of consumer lending policies, which in turn fuelled higher domestic consumption, providing an additional driver of rising prices for goods and services. Although the rise in real prices in Lebanon, which reached 89% (year on year) according to the World Bank report on food security cited above, is partly attributable to rising prices worldwide, a comparison of changes in real prices shows an increase in real prices in Lebanon nearly three times that recorded in both Rwanda (32%) and Egypt (30%). The disparity in real price increases in Lebanon confirms the state of chaos prevailing in the Lebanese market and the level of unchecked profits, which are far removed from legitimate profit. While the Minister of Economy maintained that dollarising consumer goods prices would help bring price discipline thanks to competition among merchants and commercial establishments, disparities in goods prices have persisted in the absence of a role for the Ministry of Economy and the Consumer Protection Directorate. Service prices are faring no better than goods: after posting modest increases over the past two years, service prices have climbed back to their pre-crisis levels and even higher. Private schools and universities are now returning to pre-crisis tuition rates, as are hospitals, resorts, and even manual trades.

The economic crisis afflicting Lebanon and the Lebanese could have offered an opportunity to restructure the national economy, tilt the balance in favour of the productive sectors, and expand their contribution to national income, particularly since the economic factors that previously hindered the growth of productive sectors have had a diminished impact on production costs, most notably salaries and wages and the interest rate. Yet the government's inability to address the causes of the economic crisis and its failure to draw up a roadmap for the future of the national economy are depriving Lebanon of opportunities for recovery, not only threatening price levels, but also deepening the crisis and putting solutions out of reach.

Translated from Arabic with AI. [Read it in Arabic](https://ghazimahmoud.com/articles/2023-05-10-2e0ae4/)

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- [OZ Arab Media](https://ozarab.media/الغذاء-في-لبنان-الأغلى-بين-دول-العالم/)

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