Lebanon’s Balance of Payments 2021-2022

According to the Balance of Payments (BOP) external accounts, the BOP recorded a deficit of 2646.6 million in 2022 as opposed to a deficit of 6526.9 million in 2021, and these represent the loss of official foreign reserves at BDL. This is largely explained in 2021 by the large trade deficit at 8226.5 million and the large errors and omissions due to capital flight at 3704.2 million. In 2022, however, though the trade deficit was higher at 13652.6 million because of pre-emptive buying of imports prior to tariff increases, errors and omissions were less at 488.2 million and the capital and financial account recorded a large surplus of 4322.9 million.

Also interesting is that trade in services improved in 2022 to stand at 2095.2 million, driven by better travel (tourist) services at 2129.3 million. In addition, remittances were higher at 4720.5 million as the impact of COVID had receded in 2022. FDI was lower, however, at 460.7 million because of the lack of action on the reform and recovery front.

BDL data for the BOP differ from the official external accounts since BDL includes the changes in net foreign assets of commercial banks in addition to those of BDL, whereas the external accounts don’t. In this respect, according to BDL, the BOP deficit was only 1960.5 million in 2021 (much lower than 6526.9 million) because banks’ net foreign assets were decently positive in 2021, whereas they turned slightly negative in 2022, making BDL’s BOP deficit at 3197.1 million (higher than the deficit of 2646.6 million).