Spike in staple food prices widening consumption gaps among the very poor

Key Messages

• Crisis (IPC Phase 3) outcomes persist in South Lebanon, where ongoing conflict is aggravating vulnerabilities among internally displaced persons (IDPs) and local populations within 10 km of the Blue Line. Prolonged displacement has disrupted local agricultural livelihoods and severely eroded poor rural households’ purchasing power. High inflationary trends and the July spike in staple food prices have rendered many IDPs more reliant on humanitarian assistance to cover household needs like food and shelter. In Beirut, Mount Lebanon, and the North, widespread Stressed (IPC Phase 2) outcomes remain prevalent due to the enduring economic crisis and negative impacts on the construction and tourism industries. In the east and northeast, Crisis (IPC Phase 3) outcomes are expected due to high competition over limited labor opportunities. As a result, many poor and unemployed Lebanese nationals and refugees have exhausted their livelihood coping capacities, including depleting savings and selling productive assets, and are likely resorting to coping strategies such as reducing food consumption of adults to feed children or sending children to work. 
• Tensions in southern Lebanon continued in August, and conflict events increased by 20 percent from 23 July to 06 August, compared to the previous two-week period. According to the Lebanese Ministry of Public Health, as of 23 August, internal displacement increased by 10 percent, 13 civilians were killed, bringing the civilian death toll to approximately 133. The total number of casualties since 8 October 2023 is 2,412, including 564 fatalities. Approximately 112,000 people have been displaced, and around 150,000 people continue to experience daily shelling and airstrikes in frontline border areas. Recent events do not change FEWS NET’s analysis of the most likely scenario reported in June 2024. FEWS NET continues to anticipate that IDF strikes against southern Lebanon will likely persist while the conflict in Gaza continues and even potentially following a cessation of hostilities in Gaza. However, there is a high degree of uncertainty about how the regional conflict – including in Lebanon – will develop in the coming weeks and months, and FEWS NET will continue monitoring the situation. 
• Households facing Crisis (IPC Phase 3) outcomes in North Lebanon face multidimensional poverty driven by the enduring economic crisis. High competition over income-earning opportunities and low wages continue to restrict access to typical income sources for poor Lebanese nationals and Syrian refugees amid ongoing cuts to humanitarian food assistance (HFA). Lebanese beneficiaries of the National Poverty Targeting Program (NPTP) and the Government’s Emergency Social Safety Net (ESSN) continue to rely on cash assistance transfers which have reduced in frequency from monthly to bimonthly. The NPTP has seen a 44 percent reduction in the monthly transfer value for a family of five. As of May, transfer values were only enough to cover around 29 percent of food needs and eight percent of non-food needs. Due to rising prices of the Survival Minimum Expenditure Basket (SMEB), beneficiary households have increasingly been unable to cover their immediate food needs through the NPTP, especially in July and August. As the government and WFP work to merge NPTP and ESSN, households are expected to retroactively receive the remaining amount due from the original monthly transfers; however, the exact timing is unknown.
• In July, according to the Ministry of Economy and Trade, national average prices of white rice increased by 13 percent and 26 percent for wheat flour compared to June. This is due to a combination of factors, including impacts from conflict, limited quantities of subsidized wheat remaining, resultant high consumer demand, and alleged price violations by some food vendors. There has been a gradual upward revision of the price ceiling set on subsidized white bread sold at bakeries, an increase of 17 percent since April. White rice and wheat flour prices remained stable in August, with the latter recording prices 31 percent higher year-on-year as a national average. Poor households and conflict-affected households are particularly vulnerable to price shocks, due to compounding impacts from the economic crisis and escalating conflict. Despite rapid expansion of a dollarized cash-based economy, poor households engaged in casual labor, IDPs, and pensioners continue to receive wages in local currency, leaving them vulnerable to exchange rate volatility. However, foreign remittances which account for over 30 percent of the country’s GDP continue to serve as a lifeline for a subset of poor Lebanese households.