Lebanon witnessed another dramatic inflation surge in August as the political and financial crisis continued with no solution in sight, deepening the misery of the country’s growing number of poor.

Consumer prices rose an annual 120 percent, compared to 112.4 percent in July and just under 90 percent in June, according to new data released by the official Central Administration of Statistics.

Inflation was below 20 percent as recently as March.

Price growth is soaring to levels last seen in the aftermath of the country’s civil war three decades ago after Lebanon’s currency depreciated sharply on the black market and made imports more expensive.

Politicians have failed for five weeks to form a new government capable of finding solutions to the economic and financial crises, even after a devastating explosion in Beirut on August 4.

The Central Administration of Statistics' Consumer Price Index (CPI) rose by 58.1 percent in the first eight months of 2020, up from 2.8 percent in the same period of 2019.

In addition, the CPI expanded by 120 percent in August from the same month of 2019, and registered a second consecutive triple-digit increase.

The cumulative surge in inflation during 2020 is due in part to the inability of the authorities to monitor and contain prices, as well as the deterioration of the Lebanese pound's exchange rate, which has encouraged opportunistic wholesalers and retailers to raise prices of consumer goods disproportionately.

The cost of food and non-alcoholic beverages rose just over 540 percent from last year.

Prices for water, electricity, gas and other fuels rose only 21.1 percent a year because the government maintained subsidies for petroleum products.

Lebanon’s Central Bank governor Riad Salameh said earlier that the central bank would have to stop subsidies if it needs to dip into the cash reserves that commercial lenders are required to hold with the monetary authority.

Many experts assumed that Lebanon could face unprecedented price chaos if Lebanon’s central bank lifts subsidies on fuel, wheat and medicine by the end of the year.

Clothing and footwear were nearly 510 percent more expensive than a year ago, while prices at restaurants and hotels rose by almost 610 percent, transportation (+105 percent), communication (+90 percent), healthcare costs (+14.6 percent), actual rents (+8.7 percent), imputed rents (+5.6 percent), and the cost of education (+4.4 percent).

In parallel, the CPI grew by 3.6 percent in August from the previous month, compared to a month-on-month increase of 11.4 percent in July.

Lebanon’s peg to the dollar has increasingly withered after the government’s default on $30 billion in Eurobonds in March. The local currency is now trading at around 8,000 per US dollar, compared to a fixed official exchange rate of 1,507.5.

The Economic and Social Commission for Western Asia (ESCWA) has estimated that 55 percent of the country’s population is now trapped in poverty and struggling to meet basic needs.

Inflation will spike to record levels in 2020, averaging 198.1 percent, owing to the convergence of Lebanon's economic, financial and debt crises, according to a recent report released by the Economist Intelligence Unit (EIU).