2023-07-10 15:54:56
In a thematic report entitled Lebanon’s Import Bill: Jewelry Before Baby Formulapublished on July 5, the NGO Mercy Corps highlighted the inconsistencies revealed by the examination of Lebanese imports in 2022, compared to the context of the crisis that the country has been going through since 2019.
“During economic crises, imports are usually down due to high costs and changes in consumer habits. The data on Lebanese imports in 2022 not only (contradicts) this trend, but also indicates that resources are allocated with a dubious sense of priorities,” the authors of the report notably stated in their conclusions.
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Analysts working on behalf of the NGO also recalled that imports totaled $19 billion over the last calendar year, or 90.7% of GDP for the same fiscal year, which is considerably high. They added that this same ratio was only 33.2% in 2020, a year marked by the acceleration of the crisis and the restrictions linked to Covid-19. A significant portion of imports were still subsidized that year, when the dollar/LL exchange rate had started to fall sharply. The national currency has lost 98% of its value in almost 4 years (going from 1507.5 pounds for one dollar to around 91,000 pounds currently, according to the lirarate.org site). The exchange rate subsidy mechanism that the Central Bank had opened since the end of 2019 to several categories of imports, including those relating to fuels and pharmaceutical products, began to be lifted from 2021.
The authors of the report also note that the import bill for “luxury goods” (2 billion dollars and 10.49% of the total), such as “jewellery or cars” (1.69 billion and 8.83%) had exceeded in 2022 those of “drugs and infant milk”, respectively at 2% (341 million dollars) and 0.1% of the total. They also note that imports of pharmaceutical products, including medicines, have more than halved between 2018 and 2022 (from 1.33 billion to 551 million dollars). Fuel imports remain the highest.
Note that the increase in car imports is linked to the fact that importers anticipated the alignment with the parallel market exchange rate used to calculate customs duties in pounds from the pre-tax prices in dollars which began at the end of 2022. – the rise in the famous “customs dollar”, which until December 2022 was still stuck at the old official parity. The authors of the report also note that only part of the imported jewelery is re-exported once transformed.
The report was produced for Mercy Corps by the Lebanon Crisis Analytics Team (LCAT), supported by the United States Agency for International Development (USAID) and co-funded by the European Union.
In a thematic report entitled Lebanon’s Import Bill: Jewelry Before Baby Formula, published on July 5, the NGO Mercy Corps highlighted the inconsistencies revealed by the examination of Lebanese imports in 2022, compared to the context of the crisis that the country is going through. countries since 2019. “During economic crises, imports are usually down due to…
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