BEIRUT: Lebanon’s Balance of Payments recorded a deficit of $1.84 billion during the first eight months of 2012, as flaring regional turmoil and domestic security incidents restricted capital inflows from covering the domestic trade deficit. Net foreign assets of commercial banks dropped by $2.87 billion whereas NFA of the Central Bank (BdL) increased by $1.03 billion, according to data from BdL. Lebanon’s trade deficit widened by almost 20 percent to $11.57 billion in the 12 months to August 2012, after an annual jump in oil prices boosted the value of Lebanon’s mineral imports by 71 percent year-on-year. In contrast, customary trails for foreign capital, such as tourism, foreign direct and portfolio investment saw a substantial drop with worsening domestic security. In the month of August alone, the BoP saw a deficit of $496.7 million, the second largest deficit this year after April. NFA of commercial banks dropped $616.1 million whereas NFA of BdL rose $119.4 million. In August, the number of tourists plunged 26.7 percent from the previous month to 114,929 – the lowest figure for this month since 2006 – noting that Ramadan fell during the first part of the month. Nonresidential financial sector deposits diminished 5 percent to $5.66 billion.
A version of this article appeared in the print edition of The Daily Star on October 05, 2012, on page 5.