Lebanon’s trade deficit declined by 18.57% year-on-year (y-o-y) by September, to record $10.67B due to a 17.38% decrease in overall imports outpacing the 11.10% 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 nine months of the year, amounted to $13.00B compared to $15.73B during the same period last year.
In more details, the three major product categories that were imported to Lebanon by August were mineral products (16.7% share of total imports), “machinery and electrical instruments” (12.0% share of total imports) and “products of the chemical or allied industries” (11.1% share of total imports). The yearly change in the value of imported mineral products displayed a substantial drop of 44.68% from September 2014 to $2.18B.This decline goes hand in hand with the average 45% decrease in the price of international oil since August 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 6.41% y-o-y by September. Worth mentioning that the overall tonnage imported increased from 176,162 tons by September 2014 to 435,384 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 6.41% 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 5.55% while volume steadied at a level of 350,000 tons. The decline in value was possibly associated with a decline in the overall prices of chemical products as they are closely linked to oil prices.
Notably, the three major countries that Lebanon imported goods from were China, Germany and France with respective weights of 11.89%, 6.94% and 6.06%.
Similarly, total exports fell yearly from $2.51B by September 2014 to $2.23B this year.
Specifically, the value of exported “prepared foodstuffs, beverages, and tobacco” (16.24% share of total exports) experienced a yearly detraction of 6.06% by September despite the 13.35% rise in exported volume to 279,909 tons. The decline in prices may be aligning with European prices, especially following the Euro depreciation in addition to the drop in costs due to the decline in raw material prices and their impact on input prices.
Furthermore, exported “pearls, precious stones, and metals”, constituting 14.88% of total exports, went down by 22.98% y-o-y by September. This was mainly due to the 37.5% plunge in the volume exported to 40 tons this year compared to a higher level of 65 tons recorded over the same period last year. In addition, “Machinery and electrical instruments” (13.99% share of total exports) underwent an annual 7.25% shrinkage on the back of the 17.91% fall in tonnage exported to 41,469 tons which was partially offset by a rise in export prices.
In terms of the major destinations of the Lebanese exports, United Arab Emirates, Iraq and Syria grasped corresponding weights of 10.46%, 7.61% and 7.42%.
In September alone, total exports declined by 13.62% from September 2014 to $243.39M this year. In parallel, overall imports down ticked by 14.23% to $1.43B. In turn, the trade deficit narrowed from $1.39B to $1.19B in September.
Lebanon Imports/Exports by September (in $B)