The Lebanese trade deficit has been narrowing during the past two years, resulting from a faster decline in the value of imports than exports. In 2015, Lebanon recorded a trade deficit of $15.12B, compared to a higher deficit of $17.19B in 2014. The 12.04% narrowing of deficit was mainly caused by the bearish oil and gold trends and the depreciation of the currencies of Lebanon’s major trading partners against the US Dollar, which benefited the pegged Lebanese Pound. Trade deficit represented 27.79% of 2015’s GDP, compared to a higher share of 34.35% in 2014. Exports covered 16.34% of imports in 2015, compared to 16.14% in the previous year.
Looking at total imports, their value plunged 11.83% yearly to $18.08B in 2015, however with a 1.60% growth in volume to 15.70M tons. The main reason behind the drop in value is the depreciating Euro and Yen, making imports from the European Union and Japan relatively cheaper to the Lebanese residents. Moreover, many European goods became exempted from custom fees in accordance with the European Mediterranean Association Agreement and European Free Trade Association (EFTA) agreement, effective beginning of March 2015. In parallel, the decline in crude oil prices also led to the decline in the value of imports. Worth mentioning that the increase in volume might be associated with the increase in the number of refugees fleeing their country in wartime and the improvement in real income as Lebanon recorded an average deflation rate of 3.75% during 2015.
To read the full report, click on the link below:
Lebanon’s Balance of Trade-2015 Update