Lebanon Weekly Report
March 5, 2010
Economy
Public Finances figures for the month of January 2010 showed a 31% decline in total public spending from the same period in 2009, reaching $770 million. This drop was mainly driven by a 26% decrease in interest payments on both local and foreign currency debt. In addition, spending on the electricity sector in the same reporting period dropped by 77%, reaching $62 million at end-January 2010. On the revenues side, total cash-in decreased by 7.5% from the same period in 2009, reaching $753 million. The main cause for this decline was the 75% drop in non-tax revenues reaching $47 million. Tax revenues reached $646 million, up by 11% year-on-year, mainly due to a year-on-year VAT revenue increase by 12% totaling $267 million in January 2010. However, the income generated from the customs department went down by a year-on-year 0.22% reaching $141 million. The fiscal deficit narrowed by 94% reaching $17.7 million and the primary balance recorded a surplus of $202 million from a deficit of $7 million in the same reporting period.
Rafic Hariri International Airport witnessed a 22.7% increase in the number of passengers (arrival, departure, transit) during February 2010 reaching 339 thousand compared to 276 thousand in the same month last year. Airline activity also followed the same trend as tourism activity; with 6,409 commercial flights registered during the second month of 2010, up 6% from 6,046 in February 2009. The Hariri International Airport processed 5,995 tons of freight, up 15% from the same month in 2009 and 82 tons of mail, down 13% in the same reporting period.
Lebanon’s gross public debt reached $51.6 billion at end January 2010, constituting an increase of 9.9% from $47 billion at end January 2009. Domestic debt increased by 16.7% year-on-year to $30.4 billion, while external debt went up by 1.4% annually to $21.2 billion. Local currency debt accounted for 59% of gross public debt at end January 2010 compared to 55.4% a year earlier, while foreign currency denominated debt represented 41.1% of the total compared to 44.6% during the same reporting period.
Banking & Finance
The consolidated balance sheet of commercial banks reached $116.5 billion in January 2010, up by 24% from the same month last year. Deposits with the Central Bank increased by 32% year-on-year to reach $35.7 billion. Loans to the private sector reached $24.7 billion, up by 17.7% from end-January 2009. On the liabilities' side, total private sector deposits jumped by 23.5% to reach $96 billion at end January 2010 from $77.7 billion in the same month last year. Also, the dollarization rate of deposits fell from 68.6% to 63.7% in the same reporting period.
Business
Beirut-based Noor International Holding has proposed a plan for a $10 billion real-estate development in Syria. The "Arab Stars Islands" project is set to cover an area of about 907,000 square meters and will consist of two artificial islands off the Syrian coast. The project would take up to four years to be completed once the license is granted. It would comprise residential, commercial, tourist and recreational complexes. It is worth noting that Noor International Holding has branches in seven Arab countries in addition to Rwanda, the UK, USA and China.
Alfa, the mobile operator managed by Orascom Telecom, has newly enabled its subscribers to pick a vanity phone number online from a drop list of Golden numbers at $550, Silver at $330, Bronze $220 and Regular at $55. The client is expected to receive a notification confirming that the number he picked was reserved after certain online procedures.
Market and Economic Research Division
Mazen Soueid
Stephanie Ghanem
Kim Pierce
Ziad Hariri
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