BEIRUT, June 14 (Xinhua) -- Lebanon's trade deficit narrowed by 6.1 percent to 5.3 billion U.S. dollars in the first four months of 2018 compared to the same period in 2017.
Lebanon's Byblos Bank, which released the figures from the Higher Customs Council, attributed the drop in deficit to the year-on-year decrease of 240 million dollars in imports and an increase of 105.2 million dollars in exports.
The figures released by the council show that the total value of imports reached 6.4 billion dollars in the first four months of 2018, constituting a decline of 3.6 percent from 6.6 billion dollars in the same period of 2017; while the aggregate value of exports increased by 10.9 percent year-on-year to 1.1 billion dollars in the covered period.
Nassib Ghobril, chief economist and head of the Economic Research and Analysis Department at Byblos Bank, said the import of food and cars decreased the most during this period by 8 percent and 9 percent respectively due to a drop in the purchasing power of people.
"The purchasing power of people has weakened following the government's increase in the Value Added Tax (VAT) from 10 percent to 11 percent in addition to a high inflation rate of 6 percent," he told Xinhua News Agency.
Ghobril said that the best way to reduce imports in Lebanon is through cutting down the operating costs for manufacturers which will boost local production and improve its competitiveness. "People will then consume more local products while we will be able to export more of our produce," he noted.
Byblos Bank's report said that China was the main source of imports with 697.2 million dollars or 10.9 percent of the total in the first four months of 2018, followed by Italy with 548 million dollars (8.6 percent), Greece with 492.7 million dollars (7.7 percent), Germany with 387.4 million dollars (6.1 percent), the United States with 351.2 million dollars (5.5 percent) and Egypt with 231.2 million dollars (3.6 percent).
It added that imported goods from China grew by 21.7 percent year-on-year in the covered period and those from Italy rose by 15.4 percent.
On the other hand, it noted, imported goods from the United States dropped by 33.1 percent, those from Egypt decreased by 5.1 percent while imports from Greece declined by 4 percent and those from Germany by 1.4 percent year-on-year in the first four months of 2018.
As for exports, the report suggests that they grew by 56.5 percent to Turkey in the first four months of 2018 and exports to the United Arab Emirates (UAE) increased by 52.2 percent.
In contrast, exported goods to Syria dropped by 46.1 percent while those to Saudi Arabia declined by 15.1 percent, exports to South Africa decreased by 14.3 percent and those to Iraq dropped by 7.5 percent year on year in the covered period.
Adnan Rammal, member of Beirut Merchants' Association, attributed the decrease in exports to Syria to the drop in consumption of products by the Syrian population caused by their weakened purchasing power. "Also, a big number of Syrians fled the country following the war," he said.
Rammal added that the UAE imports high value products from Lebanon such as Jewelries and designers' clothes. "Any change in the value of these products will cause a major change in exports," he said.