Lebanese Balance of Payments Components: H1 2021 vs H1 2022

1. The sub-accounts below are the most important ones; of course, not all of them.

Source: BDL

BDL has recently published the detailed balance of payments (BOP) statistics for H1 2022. The data reveals an increase in the current account deficit to $3027.8 million, largely driven by an increase in the trade deficit in goods to $6229.9 million. Interesting that trade in services increased its surplus to $947.8 million due to improved tourism. Labor remittances stayed almost the same at $2325.1 million; and given that inflows were at $3400 million, then outflows must have been close to $1100 million.

Also interesting is that the capital and financial account turned positive to $382.6 million. The reason being that Other investments turned positive to $1236.8 million, driven by lower withdrawals of deposits by non-residents and positive trade credits by residents. Note also that FDI fell to 236.7 $million, most likely as a result of the reduced demand for real estate by expatriates.

Also notable, is that unrecorded transactions turned positive at $154.4 million, after being negative in H1 2022, a result that is surely explained by reduced smuggling after the removal of subsidies and the probable frequent entry of “cash suitcases”  into the country by returning expatriates.

The balancing item is of course the change in BDL reserves which fell by $2490.9 million signifying a BOP deficit (the change in reserves is always opposite in sign to the BOP position). It is also very close to the BOP reported by BDL as the change in the banking system’s net foreign assets which was $2578.1 million by H1 2022.