Economy
Lebanon’s fiscal deficit stood at $1,950 million up until November 2011, 32% lower than it was a year earlier. In fact, government revenues increased by 13.2% to reach $8,445 million. Revenues were mainly boosted by the transfer of $1,321 million in telecom receipts to the treasury from a total of $220 million of telecom gains allocated into the government’s account in the same period last year. Conversely, tax revenues went down by 1.5% year-on-year to reach $6,055 million. The income generated from the customs department reached $1,325 million, down by 23% from the same months last year. VAT revenue increased by 3% reaching $2,041 million. On the expenditure side, total public spending reached $10,395 million, up 1.1% y-o-y. Interest payments decreased by 3.4% to $3,466 million and transfers to Electricite du Liban (EDL) went up by 47% y-o-y to $1,557 million. Lebanon’s primary balance jumped 87% y-o-y to a surplus of $1,735 million.
The number of incoming tourists to Lebanon totaled 1,655,051 in 2011, down by 24% relative to 2,167,980 tourists in 2010. Arab tourists represented 35% of total visitors to Lebanon. Visitors from Europe represented 29% of the total and were down by 11% from Jan-Dec 2010. Tourists from the Americas fell by 10.5% to 222,671. The number of tourists reached 130,013 in December 2011, up 5% from the previous month but down by 14.6% from 152,234 tourists in December 2010.
The occupancy rate at Beirut hotels reached an average of 57% in 2011 down from 68% in 2010. The year-end Middle East Hotel Benchmark survey released by Ernst & Young affirmed that Beirut hotels posted the fifth highest drop in occupancy rates after Cairo, Manama, Sharm El Sheikh and Hurghada (Egypt). The average room rate stood at $220 in Beirut, down 13.6% from an average of $255 in 2010. The average yield per room at Beirut hotels stood at $126 in 2011, down by 28% from 2010.
The United Nations ESCWA annual survey on the Economic and Social Developments for 2010-2011 indicated that domestic and regional instability could adversely impact Lebanon’s remittances, tourism receipts and capital inflows. The country saw substantial losses in its capital accounts, and remittances had begun to drop from their 2009 peak of $7.5 billion to $5.1 billion in 2010. The report added that layoffs are on the rise with the construction and tourism sectors impacted by the current political instability in Lebanon. An increase in inflation is also expected together with a recent increase in wage levels. Yet, ESCWA estimated Lebanon’s GDP growth at 2.5% in 2011 and 4.5% in 2012. It warned of Lebanon’s high debt, which puts constrains on monetary policy decisions, affecting interest rates. The report also noted that Lebanon is among the regional countries that are performing below expectations in terms of “Doing Business” indicators.
Rating agency Standard & Poor's (S&P) affirmed its 'B' long-term and 'B' short-term foreign and local-currency sovereign credit ratings on Lebanon; with a stable outlook. S&P said that continuous internal and external political challenges, constrain growth, and increase the country's vulnerability to a balance of payments crisis. It said that the country has maintained a greater degree of stability than a number of its neighbors in the MENA region. However, unlike previous crises in recent years, which had a positive effect on the Lebanese economy, the growing instability in Syria, and the uncertainty caused by the extended political transition during the first half of 2011, have depressed investment. S&P said that it could raise the ratings if the government demonstrates progress on fiscal reform, enhances domestic stability, and establishes a track record of structural reforms and infrastructure investment.
Banking & Finance
BEMO Bank released its consolidated financial statement for the period ended December 2011. The bank posted an 11% increase in net profits to $9.29 million in 2011. BEMO Bank’s total assets reached $1.53 billion, up by 27% from year-end 2010. Customer deposits climbed by 27% to $1.3 billion and customer loans surged 16% to reach $551 million. Total equity amounted to $114.6 million, up by 30% from its 2010 level.
The Central Bank's bi-monthly balance sheet for the second half of January 2012 showed total assets of $71.8 billion and foreign assets reaching $32.2 billion, up by 14% and 5% respectively from the same period last year. The value of the Central Bank's gold reserves increased by 30% year-on-year and by 11% in the first month of 2012 to $16 billion. On the liabilities side, public sector deposits reached $5 billion, up by 12% in the same reporting period.
Business
Azadea Holding Group, a Lebanese retail and fashion company, signed a franchise agreement with the Walmart-owned British retailer Asda to manage the latter’s fashion brand, George, across the Middle East. It is worth mentioning that Azadea Group manages a portfolio of 30 franchise-based retail outlets with around 360 stores spread across 11 countries in the MENA region. It operates clothing, accessories, food and beverage, home furnishings, and multimedia stores.