The results of the Byblos Bank/AUB Consumer Confidence Index show that the Index averaged 19 points in the second quarter of 2020, constituting a decline of 51% from 38.7 points in the first quarter of 2020 and a decrease of 73% from 70.9 points in the second quarter of 2019. The index registered a record low of 20.1 in April 2020 and further dropped to a new all-time low of 15.4 in May 2020, before slightly increasing to 21.6 in June 2020. Further, the Byblos Bank/AUB Present Situation Index averaged 18.9 in the second quarter of 2020 and retreated by 43% from the preceding quarter, while the Byblos Bank/AUB Expectations Index averaged 19.2 and regressed by 54.8% from the first quarter of 2020. The two sub-indices reached their lowest levels since the start of the Index's inception in July 2007.

In addition, the average monthly score of the Index in the second quarter of 2020 was 82% lower than the quarterly peak score of 105.8 registered in the fourth quarter of 2008, and was 65.5% lower than the monthly trend average of 55.3 points. The second-quarter results constitute their lowest level in 52 quarters. 
 
The collapse in household sentiment was due to the government's limited action to address the economic and financial crisis, as well as to the coronavirus-related lockdown measures that worsened socioeconomic conditions. In addition, the Lebanese pound's exchange rate in the parallel market significantly weakened in the second quarter of 2020, which, along with the substantial surge of consumer prices, have reduced the purchasing power of households. Also, the shutdown of the economy due to the pandemic led several companies to cut salaries or, in some cases, lay-off employees, which reduced households' income. Consequently, only 0.6% of Lebanese polled in June 2020 considered that their personal financial conditions improved from six months earlier, while 85.5% of respondents said that their financial situation deteriorated from December 2019. In addition, only 0.1% of the Lebanese surveyed in June 2020 considered that economic conditions in Lebanon improved from six months earlier, while 91.1% indicated that economic conditions deteriorated from December 2019.

Further, the detailed results of the Index's monthly survey reflect the prevailing frustrations of Lebanese households about the absence of measures to improve conditions in the country. Specifically, only 0.3% of the Lebanese polled in June believed that their personal financial conditions will improve in the coming six months, while 85.6% of households considered that their financial conditions will deteriorate by December 2020. In addition, 0.8% of respondents anticipated economic conditions to improve in the coming six months, while 90.3% of respondents expected business conditions to deteriorate by December 2020.     
 
The results of the Byblos Bank/AUB Consumer Confidence Index for the second quarter of 2020 show that the confidence level of residents in the North dropped by 65.3% in the second quarter of 2020 from the first quarter of the year, followed by households in the Bekaa region (-50.3%), the South (-49.7%), Mount Lebanon (-47%), and Beirut (-45%). The sentiment of residents in Beirut was the highest among all geographic regions during the second quarter of 2020, followed by households in the Bekaa, Mount Lebanon, the South and the North. Also, the confidence level of Shiite households dropped by 59.5% quarter-on-quarter in the second quarter of 2020, followed by the sentiment of Sunni households (-51.8%), Christian households (-47.3%) and Druze households (-32.7%). Christian households registered the highest level of confidence in the second quarter of 2020, followed by Druze, Sunni and Shiite households.

The Central Administration of Statistics' Consumer Price Index increased by 38.8% in the first half of 2020, compared to a growth of 3.3% in the same period of 2019. Also, the CPI expanded by 89.7% in June 2020 from the same month of 2019, and registered a double-digit increase in each month so far this year. The cumulative surge in inflation in the first half of 2020 is due in part to the ongoing deterioration of the Lebanese pound's exchange rate on the parallel market, which has encouraged opportunistic wholesalers and retailers to raise consumer prices disproportionately. It also reflects the authorities' inability to monitor and contain prices. 

The prices of furnishings & household equipment surged by 5.1 times annually in June 2020, followed by the prices of clothing & footwear (+4.45 times), prices at restaurants & hotels (+4.42 times), alcoholic beverages & tobacco (+3.54 times), food & non-alcoholic beverages (+3.47 times), miscellaneous goods & services (+2.9 times), recreation & entertainment (+2.3 times), transportation (+84.7%), communication (+83.4%), healthcare costs (+10.5%), actual rents (+8.3%), imputed rents (+5.5%), education (+4.4%), and the prices of water, electricity, gas & other fuels (+0.3%). Also, the distribution of actual rents shows that old rents grew by 11.1% and new rents increased by 6.4% year-on-year in June 2020.

In parallel, the CPI increased by 20.2% in June 2020 from the previous month, compared to a month-on-month growth of 6.9% in May 2020. The prices of furnishings & household equipment increased by 110.5% month-on-month in June 2020, followed by the cost of clothing & footwear (+57.4%), miscellaneous goods & services (+50.2%), recreation & entertainment (+47%), transportation (+41%), prices at restaurants & hotels (+30%), food & non-alcoholic beverages (+17.4%), alcoholic beverages & tobacco (+17%), the cost of water, electricity, gas & other fuels (+12.6%), healthcare costs (+4.4%), communication (+2.3%), actual rents (0.5%), education and imputed rents (+0.4% each).

Further, the CPI increased by 23.4% in the Bekaa, by 22% in the South, by 21.3% in Nabatieh, by 20.4% in the North, by 20.2% in Mount Lebanon, and by 15.4% in Beirut in June 2020. In parallel, the Fuel Price Index grew by 11% month-on-month in June 2020, while the Education Price Index expanded marginally by 0.4% in the covered month.

Figures issued by the Ministry of Finance show that the compensation of public-sector personnel totaled $2.2bn in the first four months of 2020, constituting an increase of 0.8% from $2.18bn in the same period of 2019. Salaries, wages and related benefits accounted for 62.3% of the total in the covered period, followed by retirement benefits (28.4%), end-of-service indemnities (4.8%), and transfers to public institutions to cover salaries (4.5%). 

The marginal increase in the compensation of public-sector personnel is due to a 4.1% rise in salaries, wages and related benefits, a 9.3% growth in retirement benefits and a 34.2% expansion in transfers to public institutions to cover salaries, which were nearly offset by an annual decline of 52% in end-of-service indemnities. The compensation of public-sector personnel represented the largest component of current primary spending and accounted for 67.7% of such expenditures in the first four months of 2020 compared to 73.3% in the same period of 2019. It accounted for 45% of fiscal spending in the covered period, unchanged from the same period of 2019; while it absorbed 70% of public revenues in the first four months of 2020 relative to 63.1% of government receipts in the same period of 2019. 

In parallel, salaries, wages and related benefits paid to public-sector workers amounted to $1.37bn in the first four months of 2020, up by 4.1% from $1.32bn in the same period of 2019. This category includes basic salaries, employment benefits, allowances, contributions to civil servants' cooperatives, as well as contributions to other mutual funds providing health insurance for specific categories of civil servants, mainly civil and religious judges, and employees at the Parliament. Salaries and benefits of military personnel reached $921.4m and accounted for 67.2% of salaries, wages and related benefits paid to the public sector in the first four months of 2020. The salaries and benefits of personnel in public education followed with $234.2m (17.1% of the total), then civil staff with $135.3m (9.9%), the government's contribution to the employees' cooperative with $63.7m (4.6%), and the salaries and benefits of customs employees with $16m (1.2%).

Also, the Lebanese Army's salaries totaled $592.4m in the first four months of 2020 and represented 64.3% of the salaries and benefits of military personnel. The salaries of the Internal Security Forces followed with $254.7m (27.6%), those of the General Security Forces with $55.1m (6%), and the salaries of State Security Forces with $19.2m (2.1%).

In addition, the breakdown of salaries, wages and related benefits paid to public-sector employees shows that allowances increased by $67.7m annually, and benefits and other payments given to non-military bodies rose by $30m; while basic salaries regressed by $43.1m year-on-year. Benefits include payments for transportation, overtime and family-related benefits, while other payments to non-military bodies include bonuses, and the State's contribution to the Mutual Funds and to the National Social Security Fund, among others. Basic salaries declined by 4.2% annually to $981.8m in the first four months of 2020, allowances rose by 40% to $236.8m, and benefits and other payments grew by 27.8% year-on-year to $137.3m in the first four months of 2020.