| Year | GDP | ∆GDP | M | ∆M |
| 2018 | 54.9 | 20 | ||
| 2019 | 51.6 | -3.3 | 19.2 | -0.8 |
| 2020 | 31.7 | -19.9 | 11.3 | -7.9 |
| 2021 | 23.1 | -8.6 | 13.6 | 2.3 |
| 2022 | 21 | -2.1 | 19.1 | 5.5 |
| 2023 | 20.1 | -0.9 | 17.5 | -1.6 |
| Average* | 36.3 | -8.2 | 15.4 | -3.1 |
* Excluding the outlier year 2022
The Lebanese Customs has yet to publish the goods trade figures for any month of the year 2024, and that is fairly unusual. And what makes this data gap more glaring is that BDL ‘s balance of payments data usually lags Customs data by a year. At the same time, the year 2024 saw some interesting developments: a major war escalation in October-November, yet BDL managed to increase its liquid foreign reserves from $9.5 billion at end 2023 to $10.2 billion at end 2024. So most likely, imports of goods must have fallen and so would the ensuing trade deficit, especially with the reduction in air freight. But by how much?
To estimate goods imports, we will resort to the concept of the elasticity of imports with respect to GDP, m, which captures the responsiveness of imports to changes in GDP, and is measured as % change in imports M divided by the % change in GDP. Or:
m = (∆M/∆GDP) x (GDP/M)
The table above shows the data for GDP and goods imports for the period extending from 2018 to 2023. We can use these data to calculate m, in average terms:
m = -3.1/-8.2 x 36.3/15.4 = 0.9
But the above value for the elasticity of imports with respect to GDP excludes year 2022, which was an outlier year as imports increased considerably to pre-empt the rise in custom tariffs in 2023. And with m = 0.9, this means that a 1% decrease in GDP reduces goods imports by 0.9%.
Moreover, the WB estimates that 2024 has seen a reduction in GDP from consumption by $2.9 billion and from tourism by $1.3 billion, to a total decline in GDP of $4.2 billion mostly in October-November. That is 21% of the GDP in 2023 of $20.1 billion (implying obviously that GDP in 2024 was less by 21%). Hence, the resulting % reduction in goods imports in 2024 is = 21% x 0.9 = 18.9%; and since goods imports were $17.5 billion in 2023, then they must have declined by $3.3 billion in 2024, making goods imports in 2024 at $15.2 billion.
A level of goods imports at $15.2 billion in 2024 is very close to the average of the period under study of $15.4 billion. There is an outside chance that imports might end up actually higher, as we believe that a fall in GDP from tourism of $1.3 billion in October/November is a bit on the high side as these are not srong tourist months. As such, imports in 2024 could be a bit higher at around $16 billion.
But the fact remains that goods imports during the crisis years have been almost two-thirds GDP. That is unreasonably high. And it could be explained by one or a combination of three things: first, part of the imports are smuggled back to Syria; second, Lebanese GDP or wealth in general are notably undervalued; third, Lebanese productive capacity has either been undermined because of the crisis or not good enough to have taken advantage of the severely devalued exchange rates.