BEIRUT: Lebanon’s balance of trade deficit continued to swell in the first half of 2011 as the long-running political crisis, economic slowdown and the regional tension left most sectors in tatters.

According to Bank Audi’s Lebanon Weekly Monitor, imports went up, yet this increase carried with it a significant inflationary effect, while exports remained almost constant over the first half of 2011 relative to the same period in 2010.

“This contributed to a widening of 9.9 percent in the trade deficit relative to the same period of the previous year to reach $7.110 billion, according to figures released by the Higher Customs Council. Along the same line, the export-to-import coverage ratio fell from 24.6 percent in the first half of 2010 to 22.9 percent in the same period of this year,” Audi said.

Exports rose by a yearly 0.2 percent in the first half of 2011 and reached $2.118 billion.

Imports saw a yearly rise of 7.6 percent over the first half of 2011, reaching $9.228 billion, as compared to $8.580 billion over the same period of the previous year.

“It is worth noting that imports of consumer products grew by 15.4 percent, indicating a rise in total consumption in the country, which apparently was not affected by local political events,” Audi said.

It added that Lebanese citizens have more or less adapted to political downturns in the country and it takes a major shock for them to shift their consumption behavior, as evidenced by the aforementioned increase.

Imports of investment goods, on the other hand, declined by 0.9 percent.

Lebanon’s import bill was significantly affected by the rise in oil prices as the value of oil imports accounts for about 20 percent of Lebanese imports.

“Beyond the adverse inflationary effects that the surge in oil prices year to-date holds for the Lebanese economy, such an oil shock raises Lebanon’s import bill by no less than $1 billion on an annual basis. Indeed, oil prices saw an upsurge of 42 percent in the first half of 2011, following the stoppage of oil production in Libya and fears of contagion to other oil exporting countries.

When accounting for this augmentation, the real value of Lebanese imports would actually witness a much lower growth of 1.4 percent over the period, indicating that real demand in the country witnessed a minor expansion.

The breakdown of Lebanese exports by country of destination in the first half of 2011 indicates that Switzerland was the major export destination with $217 million, or 10.2 percent of the total. It was followed by the UAE with $163 million, or 7.7 percent of the total, Saudi Arabia with $160 million (7.6 percent), Turkey with $150 million (7.1 percent), Iraq with $123 million (5.8 percent), and Syria with $95 million (4.5 percent).

As for the breakdown of imports to Lebanon by country of origin, it reveals that the Italy was the main source of imports with $895 million, or 9.7 percent, of the total, followed by the U.S. with $841 million, or 9.1 percent of the total, China with $789 million, or 8.6 percent, France with $714 million, or 7.7 percent, Germany with $569 million, or 6.2 percent, and Egypt with $401 million, or 4.3 percent.