Poverty in Lebanon tripled over a decade, World Bank says

Lebanese have struggled with significant loss of purchasing power since start of the 2019 economic crisis

People queue outside a bakery in the southern Lebanese city of Sidon. The country has been gripped by an economic crisis since 2019. AFP
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Poverty in Lebanon has more than tripled over a decade as overall prices jumped 15 times higher, eroding the purchasing power of families, the World Bank said in a report on Thursday.

The percentage of people in the country living below the poverty line surged from 12 per cent in 2012 to 44 per cent in 2022, the Washington-based lender said.

The World Bank’s survey data covered the population in five of the country’s eight governorates – Akkar, Beirut, Beqaa, North Lebanon and most of Mount Lebanon.

One out of every three people living in those governorates was poverty-stricken in 2022, up from 11 per cent in 2012.

Uneven spread of poverty

The World Bank found the spread of poverty was uneven throughout Lebanon and is increasing quickly in the northern regions.

In Beirut, the poverty rate is 2 per cent, but it rises to 62 per cent in Akkar. North Lebanon and Akkar, which have significant agricultural workforces, have reported higher increases in poverty since 2012.

Agricultural workers are among the poorest in the population, followed by those who work in construction. Households in Lebanon have also struggled with a significant loss of purchasing power since the start of the 2019 economic crisis.

“Five tumultuous years into an economic crisis have adversely affected all but the richest segment of society, contributing to growing food insecurity,” the report said.

Annual inflation, which is driven by a plummeting currency that lost 98 per cent of its pre-crisis value by last December, has remained in the triple digits since 2021, it added.

The crisis erupted in 2019, when the system completely collapsed after years of public funds being squandered. It has resulted in more than $70 billion in financial losses and a 95 per cent devaluation of the national currency.

Since 2022, Lebanon has reached what the World Bank described as a “temporary bottom”, with the volatile exchange rate temporarily stabilising due to tourism revenue and significant remittances from the Lebanese diaspora.

The International Monetary Fund said on Thursday that Lebanon's monetary and fiscal reforms were insufficient for recovery, as the country remains mired in the economic crisis.

Falling deeper into poverty

The World Bank report said Lebanese were also sinking deeper into poverty. The poverty gap, the minimum financial amount required to bring the spending levels of the poor up to the poverty line, increased to 9.4 per cent in 2022, from 3 per cent in 2012.

The report also showed a change in consumption patterns.

It said Lebanese households were consuming a third of the amount of (mostly imported) meat and seafood in 2022 compared with a decade earlier, while the consumption of more affordable bread and cereals has risen by more than 20 per cent.

A new, unofficial poverty line was developed for 2022 to reflect the consumption behaviour of households amid the crisis. The existing national poverty line is outdated as it relies on consumption patterns from 2012 that no longer reflect the realities and conditions faced by households in Lebanon, the World Bank said.

Poverty causes change in diet

Rising prices have caused food insecurity to increase, which has not only reduced food purchases but also forced a change in diet among Lebanese.

Nearly 32 per cent of poor households surveyed in 2022 and 2023 have less than acceptable food consumption scores, which are used to assess dietary diversity, consumption frequency and the relative nutritional importance of different food groups.

Almost 83 per cent of all households surveyed said they relied on “less preferred or cheaper food” in at least one out of the seven days before the survey.

“Poor households were twice as likely as non-poor families to cut meal portions, reduce the number of meals, borrow food or rely on assistance from relatives or friends, and nearly four times as likely to have an adult member restrict their food intake to feed their children,” the World Bank report said.

Updated: May 24, 2024, 11:08 AM