Lebanon’s Trade Deficit Plunged by 18.78% y-o-y to $7B in H1

Lebanon’s trade deficit dropped by 18.78% year-on-year (y-o-y) in H1, 2015 to record  $7B due to a 16.77% decrease in overall imports outpacing the 6.34% decline in total exports. This was mainly due to the prominent trend of the depreciating Euro and falling international oil prices, over the same period.

Total imports, in the first six months of the year, tallied $8.56B compared to $10.28B during the same period last year.

 In more details, the three major product categories that were imported to Lebanon by June were mineral products (16.2% share of total imports), “machinery and electrical instruments” (12.2% share of total imports) and  “products of the chemical or allied industries” (11.5% share of total imports). The yearly change in imported mineral products, displayed a substantial drop of 42.10% from June 2014 to $1.38B. With demand for that commodity being inelastic, the nose dive in mineral imports goes hand in hand with the average 45% decrease in the price of international oil since June of last year. In addition, “machinery and electrical instruments” went down by 8.32% y-o-y by June, despite the increase in tonnage imported from 119 tons by June 2014 to 376 tons this year. So this downturn might be attributed to the drop in overall Chinese prices and the depreciating Euro since China and Europe sell a large bulk of electrical appliances to Lebanon.  “Products of the chemical or allied industries” also downturned by an annual 4.19% despite a rather stable demand for the related product, illustrated by the slight decrease in tonnage from 260 to 255 by June 2015. Notably, the three major countries that Lebanon imported goods from were China, Germany and France with corresponding weights of 11.63%, 6.56% and 6.83%.

Similarly, total exports fell yearly by 6.34% to $1.55B by June 2014 despite the 1.42% increase in volume of overall exports to 969 tons.

Specifically, exported “prepared foodstuffs, beverages, and tobacco” (16.33% share of total exports) experienced a yearly detraction of 4.62% by June as the volume exported declined from 181 tons to 167 tons. Furthermore, exported “pearls, precious stones, and metals”, constituting 15.29% of total exports, went down by 21.59% y-o-y partially due to the average 6.81% y-o-y fall of international price of gold to 1,180.37 $/ounce. In contrast, “Machinery and electrical instruments” (14.75% share of total exports) underwent a 1.38% improvement in the value of exports due to the rise in export prices. In terms of the major destinations of the Lebanese exports, Saudi Arabia, United Arab Emirates and Iraq grasped respective weights of 12.78%, 10.29% and 7.34%.

In June alone, total exports dropped by 4.08% from June 2014 to $281.30M this year. In parallel, overall imports down ticked by 7.04% to $1.46B. In turn, the trade deficit narrowed from $1.289B to $1.18B in June.

Lebanon Imports/Exports by June (in $B)

Lebanon’s Trade Deficit Plunged by 18.78% y-o-y to $7B in H1

Source: Customs

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