The economic slowdown of the Lebanese economy has persisted for several years with marginal growth in GDP levels, and the beginning of 2018 was no different. In fact, the private sector’s business conditions kept on deteriorating as depicted by Lebanon’s Purchasing Managers’ Index (PMI) that averaged 46.9 points in the first quarters of 2018, compared to 47.4 during the same period in 2017, standing well below the 50-points mark, separating economic growth from contraction.
Despite severe economic conditions in the previous years, the Lebanese banking sector proved its robustness and resilience; however, escape was inevitable for this sector during the first quarter of the year. Loans granted by the Lebanese banks have witnessed a compounded annual growth rate (CAGR) of 8.9% during the past 5 years, yet recorded a marginal drop of 0.04% in Q1 2018. According to the Central Bank’s latest data, the total value of credit provided by the Lebanese banks to the economic sectors excluding those to the financial intermediation reached $65.01B by March 2018 standing at 121% of 2018’s IMF estimated Gross Domestic Product (GDP).
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