BEIRUT: Lebanon’s Consumer Price Index grew at an annualized 2.77 percent in August to reach 116.2 points, regaining momentum after timid growth in July. Although the index inched up only a meager 0.52 percent compared to July, the rise remains significant given the sources of inflation were the key food and transportation sectors.

The main driver for the resurgence of inflation was the index’s main component, food and nonalcoholic beverages, which represents nearly 20 percent of spending by the average household.

The component’s index jumped to 128.1 points during the month, a 1.5 percent increase over July and the fastest growth rate since April of this year according to the Central Administration of Statistics.

Transportation costs, the CPI’s third-largest component, grew 1.12 percent in August over the previous month.

Compared to August 2010, transportation services were 7.5 percent higher, reflecting the global and domestic increase in gasoline prices.

According to the report, no sector registered a decline in prices although most were either stable or slightly ahead of July.

The index is expected to reach 121 points by December 2011 based on a 6 percent inflation forecast by the Central Bank governor and Standard Chartered.

In particular, the index for education, which represents 7.7 percent of consumer spending, may be one source of inflation in the remaining months of the year, as it is usually adjusted once a year in October, and in 2010 advanced by 6.6 percent.

On the other hand, the rise in prices of water, electricity, gas and other fuels appears to have slowed down since June, reflecting mainly the decline in international fuel prices.

With economic growth forecasts revised downwards to a five-year low of 1.3 percent by a recent Economist Intelligence Unit report, inflation may in fact surprise analysts by heading towards a weaker showing than the 2010 rate of 4.6 percent, assuming no sudden increases in international fuel prices.

But the statistics submitted by the CPI, which is under the jurisdiction of the Prime Minister’s office, is seriously being challenged by NGOs and independent consumer advocates who argue that inflation in Lebanon is far above the 6 percent ceiling.

Consumer Lebanon, which is expected to release a new survey on the cost of living soon, said prices of basic commodities in the first three months of this year surged by more than 18 percent.

“The government only uses specific items in its basket. This basket includes basic food items but they [government] do not mention other important items such as transportation cost, rents of apartments and school tuitions. If we add all these items then the price index will be much higher,” Zuhair Berro, the head of Consumer Lebanon, told The Daily Star.

Berro stressed that inflation is way above 6 percent.

“All basic commodities have surged to alarming levels this year due to several factors. How can the government say that inflation is only 6 percent? No one believes this figures,” Berro said.

He added that the even the World Bank does not officially acknowledge the inflation figures of the government and the Central Bank.

“The World Bank considers inflation and cost of living figures in Lebanon as nothing more than an opinion and not actual scientific facts,” Berro said.