The Largest Trade Deficit in Five Years
Lebanon reported its biggest trade deficit ever. Total imports reached $9.2bn in the first five months of 2012,constituting an increase of 19.8% from the same period last year; while aggregate exports rose by 7% to $1.8bn, leading to a trade deficit of $7.3bn, up 23.4% year-on-year.
The deficit was the highest deficit in five years in both value and volume terms, and was caused by a rise of $1.5bn in imports from the same period last year and an increase of $120m in exports, as reported by Lebanon This Week, Byblos Bank newsletter.
Imports of oil and mineral fuels increased by 94% year-on-year to $2.9bn, and non-hydrocarbon imports grew by 2.1% to $6.3bn. In volume terms, imports reached 6,850 million tons in the first five months of 2012, constituting an increase of 22.4% from the same period in 2011; while exports posted a 25.6% drop to 929 million tons in the covered period, leading to a trade deficit of 5,921 million tons, up 36.1% year-on-year. Imports of oil and mineral fuel surged by 61.9% year-on-year to 3,199 million tons, while non-hydrocarbon imports rose by 0.8% annually to 3,651 million tons.
The trade deficit was $1.2bn in May 2012, up 7% from the same month of the previous year. Imports averaged $1.8bn and exports averaged $365m on a monthly basis year-to-May, resulting in an average monthly trade deficit of $1.5bn during the covered period. The coverage ratio reached 19.9% in the first five months of 2012 compared to 22.3% in the same period in 2011, while it reached 21.6% in May 2012 relative to 23.9% in May of the previous year.
The rise in imports was mainly due to a significantly higher mineral fuels & oil bill. The increase in exports was mainly driven by the rise in international gold and silver prices, with exports of unwrought gold, un-mounted diamond & precious metals increasing in value by 35% or $196m and rising by 5% in volume terms in the first five months of the year. Excluding this item, exports dropped in value by 7%, or by $75m, partly due to lower exports to Arab countries and as a result of the political instability in the region. Exports to Arab countries increased by 7%, largely due to a rise in exports to Saudi Arabia and Syria by 20% each. But the increase was offset with a 33% year-on-year drop in exports to Iraq, mainly due to political unrest in Syria which represents Lebanon's only overland trade route for exports.
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