According to Byblos Bank and the American University of Beirut (AUB), the diplomatic crisis with GCC countries, the waste management crisis, and the persistent political insecurity overshadowed the positive hopes derived from the reconciliation between the Lebanese Forces and the Free Patriotic Movement, the drop in oil prices and the successful municipal elections during the first half of the year.
As such, Lebanon’s Consumer Confidence Index (CCI) registered a 5.7% decrease from the beginning of the year, yet a 0.6% growth from the first quarter of 2016, to reach 36 in the first half of 2016. The CCI measures the present sentiment and the expectations of Lebanese consumers towards the economy and their own financial situation. In details, this index is divided into two sub-indices, the present situation index (PSI), which measures overall consumer sentiments toward the present economic situation, and the Expectations Index (EI), which assesses overall consumer sentiments toward the short-term future economic situation. The PSI and the EI moved in opposite directions for the first half of the year, with the PSI rising 15.58% to 37.1 and the EI dropping 4.24% to 36.1, since the beginning of the year.
The Byblos/AUB CCI depicted the current period as a period of deepening uncertainties, as supported by the index’s low levels since the beginning of 2012. As a matter of fact, the ongoing political instability in Lebanon’s neighboring countries following the eruption of the war in Syria and the institutional paralysis within the country itself are the major reasons behind the deteriorating sentiment.
Moreover, the Byblos/AUB CCI also sorts Lebanese by category. The main categories were gender, age, occupation, and administrative district. In details, in June 2016, the confidence level among women was higher than that of males, where the female confidence level stood at 36.9, while that of males stood at 36. As for age, the 21 to 29 year-old bracket witnessed the steepest deterioration in confidence levels from 48.5 in Dec 2015 to 43.3 end of H1 2016. Also, the unemployed consumers were the most pessimistic during the first two quarters of 2016, with a confidence level of 17.7 in June 2016. Regionally, due to security breaches in the Bekaa region, households within this area were the least optimistic this year with a CCI plunging from 25.6 end of Q4 2015 to 19.8 in June 2016.
Monthly changes in CCI Levels
Source: Byblos Bank