Inflation and the Purchasing Power of Fixed Incomes in Lebanon A Descriptive Analysis of Annual Data from 2019 to 2024
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This study examines how Lebanon’s inflation between the 2019 and 2024 annual averages changed the purchasing power of an unchanged nominal income. It combines published consumer-price inflation rates with a reproducible index calculation and illustrative income-adjustment scenarios. Five annual inflation observations for 2020–2024 are taken from the World Bank’s World Development Indicators, using the displayed one-decimal precision, with 2019 normalized to 100. The reconstructed price index reaches 5,960.78 in 2024, approximately 59.61 times the baseline. An unchanged nominal income consequently retains 1.68% of its 2019 purchasing power. A hypothetical income increased each year by half that year’s inflation retains 20.32%, while full contemporaneous annual indexation preserves the baseline by construction. Although inflation falls from 221.3% in 2023 to 45.2% in 2024, the price level continues to rise. These results demonstrate the importance of compounding and of distinguishing disinflation from a reversal of previous price increases. The analysis is descriptive and conditional: it does not estimate actual household income losses, poverty changes, or causal effects of monetary policy. Its practical contribution is a transparent framework for evaluating nominal income adjustments against cumulative inflation.
Keywords
Consumer Price Index, Income Indexation, Inflation, Lebanon, Purchasing Power, Real Income