Lebanon’s Trade Deficit Continues to Show a Contraction by July

Lebanon’s trade deficit dropped by 16.90% year-on-year (y-o-y) by July, to record  $8.31B due to a 15.53% decrease in overall imports outpacing the 8.44% decline in total exports. The prominent trend of both the depreciating Euro and falling international oil prices are the main factors behind the contractionary trade deficit drift being registered since the start of the year.

Total imports, in the first seven months of the year, amounted to $10.08B compared to $11.94B during the same period last year.

 In more details, the three major product categories that were imported to Lebanon by July were mineral products (16.2% share of total imports), “machinery and electrical instruments” (12.4% share of total imports) and  “products of the chemical or allied industries” (11.4% share of total imports). The yearly change in the value of imported mineral products displayed a substantial drop of 42.12% from July 2014 to $1.63B. This decline goes hand in hand  with the average 45% decrease in the price of international oil since July of last year, noting that demand for this essential commodity is inelastic.

In addition, the value of “machinery and electrical instruments” imported went down by 4.38% y-o-y by July. Worth mentioning that the overall tonnage imported increased from 137,417 tons by July 2014 to 400,888 tons this year. Notably, in the month of April alone, 279,862 tons were brought into Lebanon, as electrical transformers were the bulk of those imports. With that in mind, the 4.38% decline came about from a price fall possibly on the back of deteriorating Chinese prices and the depreciating Euro since China and Europe sell about 40% of electrical appliances to Lebanon.  

Total worth of “Products of the chemical or allied industries” entering Lebanon also downturned by an annual 4.99% while volume steadied at a level of 290,000 tons. The latter decline was possibly associated with a decline in the overall price of chemical products. Notably, the three major countries that Lebanon imported goods from were China, Germany and France with respective weights of 11.73%, 7.05% and 6.36%.

Similarly, total exports fell yearly from $1.93B by July 2014 to $1.77B by July 2015.

Specifically, the value of exported “prepared foodstuffs, beverages, and tobacco” (16.37% share of total exports) experienced a yearly detraction of 4.94% by July despite the 7.04% rise in exported volume to 212,795 tons. It seems that the Lebanese fast moving consumer goods’ (FMCGs) market is following the global bearish price trend of over-the-counter commodities.  

Furthermore, exported “pearls, precious stones, and metals”, constituting 15.31% of total exports, went down by 22.74% y-o-y by July. This was mainly due to the 28.89% plunge in the volume exported to 32 tons this year compared to a higher level of 45 tons recorded over the same period last year. In addition, “Machinery and electrical instruments” (14.53% share of total exports) underwent an annual 1.64% shrinkage on the back of the 16.89% fall in tonnage exported to 33,132 tons which was partially offset by rise in export prices. In terms of the major destinations of the Lebanese exports, Saudi Arabia, United Arab Emirates and Iraq grasped corresponding weights of 12.83%, 10.32% and 7.42%.

In July alone, total exports dropped by 21.07% from July 2014 to $218.03M this year. In parallel, overall imports down ticked by 7.86% to $1.53B. In turn, the trade deficit narrowed from $1.389B to $1.31B in June.

Lebanon Imports/Exports by July (in $B)

Lebanon’s Trade Deficit Continues to Show a Contraction by July

Source: Customs

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