The BLOM Lebanon Purchasing Managers’ Index (PMI) stood at 46.2 in April 2018, its lowest level of the year so far. The index was weighed down by a faster deterioration in the levels of output and employment at Lebanese private sector firms. Geopolitical instability was cited by the surveyed Lebanese private sector companies as a factor negatively impacting tourism and client demand.
In fact, several macroeconomic indicators point to slower business activity and are in line with the PMI’s readings. According to data from the Association of Banks in Lebanon (ABL), the value of cleared checks dropped from $17.96 billion in the fourth quarter of 2017 (Q4 2017) to $16.82 billion in Q1 2018. Moreover, the number of new registered passenger and commercial cars registered a double digit drop of 18% from 9,878 cars in Q4 2017 to 8,136 cars in Q1 2018. Meanwhile, the negative impact of regional turmoil on the tourism sector is shown by the drop in the number of Kafalat loan guarantees granted in the tourism sector from 29 loan guarantees in Q4 2017 to 20 loan guarantees in Q1 2018.
However, the month of April was marked by major events which potentially carry positive long-term impacts. The CEDRE Donor Conference was successful since the international community pledged its support for Lebanon’s Capital Investment Program (CIP) through $11 billion worth of loans and grants. Moreover, the buildup to the first Parliamentary elections in 9 years due on May 6th is also positive as it signals the end of a long political deadlock and the return to policy-making.
Click below for the detailed PMI results in April: