BEIRUT: Lebanon’s foreign trade deficit in the first four months of 2011 widened to $4.749 billion due to a drop in exports.
Export-to-import coverage ratio also fell from 23.6 percent in the first four months of 2010 to 21.9 percent in the same period of this year, according to a report published by Bank Audi’s Weekly Monitor.
Exports fell by 2 percent year-on-year in the first four months of 2011 and reached $1.330 billion, compared to $1.357 billion during the same period in 2010.
“This indicates a slower demand for Lebanese products from abroad, which takes place within the context of a regional political turmoil that is negatively affecting consumer and investor sentiment in Arab countries under turmoil, which are major importers of Lebanese products,” the report said.
“About 12 percent of Lebanon’s exports are directed to Syria, Egypt, Libya, Tunisia, Yemen and Bahrain that witnessed political and security troubles in the early months of 2011,” the report added.
As for imports, their value saw a yearly increase of 5.5 percent over the first four months of 2011, reaching $6.079 billion, as compared to $5.762 billion over the same period of the previous year.
The report stressed, however, that Lebanon’s import bill was significantly affected by the rise in oil prices as the value of oil imports accounts for around 22 percent of total Lebanese imports.
Beyond the adverse inflationary effects that the surge in oil prices this year holds for the Lebanese economy, such an oil shock raises Lebanon’s import bill by no less than $1 billion on an annual basis.
Oil prices saw an upsurge of 37 percent in the first four months of 2011, following the stoppage of oil production in Libya and fears of protests spreading to other oil exporting countries.
When accounting for this augmentation, the real value of Lebanese imports would actually witness a decline of 0.7 percent over the period, indicating that real demand in the country remained somewhat stagnant.