As wheat and oil prices surge across the region following Russia’s invasion of Ukraine, Lebanon has been witnessing scenes echoing the height of last summer’s crippling fuel crisis, when shortages hit supermarkets, grocery stores and bakeries, while cars stood for hours on end in long queues in front of gas stations.
Back then, a World Bank report had noted that Lebanon’s economic collapse is likely to rank among the world’s worst financial crises since the mid-19th century. The Lebanese currency had already lost more than 85% of its value against the dollar, and more than three-quarters of the population was already living in multidimensional poverty.
But as a country heavily reliant on imports for its basic needs, including food, experts believe that Lebanon’s crisis will only get worse with Russia’s war on Ukraine, the consequences of which are already being deeply felt across the Middle East and North Africa.
Russia and Ukraine account for more than a quarter of the world’s annual wheat sales.
“Lebanon is already going through a harsh crisis with an economic recession. The Lebanese population have lost jobs, savings, and the purchasing power of their income due to high inflation, the sharp devaluation of the currency, and the banking system crisis,” Patrick Mardini, economist and head of the Lebanese Institute for Market Studies, told Middle East Eye.
“Now with the additional problem related to higher global prices of wheat and oil, everything will become expensive in the country, with higher consumer price and inflation.”