Mohammad Knio, PhD in Economics – UK Cardiff University
Lebanon’s history making 2019 revolution is the largest and most ambitious in 15 years.
Lebanon is an infuriating inspiring country. Over the past 15 days, hundreds of thousands of people in Lebanon have been protesting all over the Lebanese regions.
In order, to have clear demands for the revolution we need to acquire a detailed situation and statistical analysis on the major components of the Lebanese economy and their major gaps.
The Lebanese economy is strictly dependent on these five listed components:
• GDP and GDP Growth.
• Government Public Debt.
• Government Balance of Trade.
• Tourism Sector.
• Banking Sector.
1. GDP and GDP Growth:
While reporting on the GDP and GDP Growth, it is very imperative to know that the GDP had a slight increase from the year 2014 until the year 2019 from 72,806,000 to 89,935,000 where real GDP growth has averaged 9.79%.
2. Government Public Debt:
The government public debt refers to how much a country owes to lenders outside of itself. It is the accumulation of annual budget deficit.
Statistically speaking with respect to our second stated component, the government public debt has widened from 63.95% to 80.39% between the years 2014 and 2018 escalating the debt crisis by 25.7%.
3. Government Balance of Trade:
Furthermore, with the government balance of trade, the balance of trade deficit has expanded from year 2016 with an average of -16,143 to the year 2018 with an average of -17,028 attaining a percentage of 5.48%.
The major Lebanese exports destinations are UAE by 15.49%, KSA by 7.19% and Iraq by 4.99 while our major import sources are China by 10.25% and Germany by 5.85%.
The exports product breakdown heavily rely on pearls, precious stones and metals by 21.95%, followed by tobacco and beverages by 12.96%, while the imports product breakdown puts a great emphasize on mineral products by 20.86% along with machinery and electrical instruments by 11.62%.
4. The Tourism Sector:
The tourism industry in Lebanon has been one of the leading economic sectors and remains this day to be a major source of revenue for Lebanon. After the Presidential elections in 2016, the tourism sector has nourished with an average of 8% between the years 2014 and 2015, noting that in 2014 Lebanon has welcomed 1,800,000 tourists while in 2018 it has welcomed 1,950,000 tourists. The ultimate reason behind this was the retention of the Lebanese safety measures through electing the President of the Lebanese Republic and the assigning the new government along with electing the new parliament.
5. The Banking Sector:
The Lebanese banking sector has acted as a backbone of the entire Lebanese economy, providing funding for its sovereign debt by attracting and accumulating customer deposits.
Due to the Lebanese political instability, the deposit in the banking sector has diminished by 0.9% in the year 2019 in-comparison with 2018. It is imperative to mention that the year 2018 has showed a growth rate of 4.2%. On the other side, because of the government’s new budgeting law preventing lending residential laws, the growth rate of lending residential loans has deteriorated by 4.7.
Based on my personal belief; that change requires an in-depth understanding and diagnosis of the current economical context stay tuned to a new article showcasing some effective strategies that could be adopted by the Lebanese government or the central bank to combat our current financial crisis. Please share your comments and insights and let us make the most of this digital development and human oriented platform.