In numbers – How do we disburse expatriate remittances?

Muhammad Wahba wrote in Al-Akhbar newspaper: In 2023, Lebanon imported $17.5 billion and exported $2.99 ​​billion, meaning that the trade deficit reached $14.52 billion. Importing goods represents about 97.7% of the gross domestic product, estimated at $17.9 billion according to the World Bank, while the trade deficit is equivalent to 81% of the output. This deficit constituted the largest and primary source in recording Lebanon’s current financial account, a deficit that amounted in 2023 to about $1.98 billion. Lebanese customs statistics, which were recently issued, indicate that Lebanon’s imports of goods decreased in 2023 compared to the previous year, by $2 billion. To reach 17 billion. These imports are almost equal to the average of the last ten years, amounting to $17.8 billion. On the other hand, exports decreased by $510 million to reach $2.99 ​​billion, compared to the average of the last ten years of $3.36 billion.

In a clearer sense, it can be said, based on this indicator alone, that imported consumption has recovered and returned to its normal levels as if the crisis did not exist, but comparing imports to the gross domestic product indicates a large concentration in imported consumption. Rather, it appears that the entire output is imported consumption in excess of The average of the last ten years is much higher. The import-to-output ratio has risen to reach 95% in 2023 compared to an average of about 50.9% in the last ten years, meaning it has doubled. This percentage was 44.5% in 2014, and between 2015 and 2020 it was almost stable at 36%, but with the lifting of support, it began to increase to reach 59% in 2021, 90.5% in 2022, and 95% in 2023.

The rise in this percentage is a clear indicator that production in Lebanon has deteriorated, and that reliance on external production is the basis of domestic consumption, something that clearly appears in the comparison of exports, which declined to 2015 levels. But it appears more clearly in the issue of financing, as remittances from expatriates to… Local families did not decline in value much, but rather continued to fluctuate between $6.4 and $7.4 billion in the five years of the crisis (2019 – 2023), with an average of $6.6 billion, but their percentage to GDP doubled from 14.3% in 2019 to 35.7% in 2023. That is, reliance on remittances from expatriates has increased more and more. These remittances represent about 36% of the per capita income (per capita output), which according to the World Bank amounts to about $3,350 in 2023. According to simplified calculations, the real per capita GDP after adding remittances from expatriates will increase to $4,580 in 2023.

In conclusion, it seems that the high trade deficit resulting from excessive imports is not a positive indicator, but rather a negative indicator that the foreign exchange cycle in Lebanon is very short. The dollars that come to Lebanon are now limited to remittances from expatriates mainly and then from international and political sources, the majority of which come through clear channels. However, these dollars soon leave the Lebanese economy to finance the import of goods, and thus do not have any added value in the economy.

According to customs statistics, the import of petroleum derivatives accounted for the largest proportion of imports, as Lebanon imported $4.3 billion worth of (gasoline, diesel, gas, and kerosene) for aviation, in addition to $200 million for importing asphalt and oils produced from oil. These imports equal about 26% of the total imports in 2023. Also, imports of gold, its bullion, and precious stones come in second place in terms of imports. Lebanon imported pearls worth more than $340 million (70 kilograms) and imported raw and half-worked gold bullion worth more than $2 billion (33,958 kilograms). Imports of pearls and gold represent about 13.9% of the total import.

In contrast to this group of imports, everything that Lebanon imported that could be included in the category of food represents about 17% of the total import, or a value of 2.9 billion dollars. It imported live animals and animal products worth $787 million, plant products worth $945 million, in addition to animal or vegetable grease, fats and oils worth $221 million, and food industry products worth $1 billion.

It is also noteworthy that Lebanon imported transportation equipment worth $1.15 billion, equivalent to 6.75% of total imports. It turned out that $1.1 billion was due to the import of new and used cars, car parts and supplies (car breakage), car spare parts, and cars designated for transporting goods and passengers. The import value of tourist cars of all categories (small, medium and large) amounted to 734 million dollars, distributed over 31,781 cars. The value of importing goods transport vehicles amounted to $72 million, distributed over 9,324 cars.

Importing machinery and electrical appliances accounted for 9.3% of the total import, with a value of $1.6 billion. The list of these machines includes what is industrial and what is consumer. This includes electric generators, generating sets, ovens, batteries, parts, vacuums, hair trimmers, plucking devices, thermal ovens, welding machines, irons, refrigerators, air conditioners, cameras, alarms, and others.

Lebanon also imported $1.26 billion worth of chemical industry products, or the equivalent of 7.22% of the total import. This includes pharmaceutical products worth $621 million, fertilizers worth $43 million, and a basket of oils, cosmetics and perfumes worth $160 million.

• 760 million dollars

It is the value of pearl and precious metal exports from Lebanon in 2023. It is the largest export item in terms of value, with a volume of 60 tons.

• $428.8 million

It is the value of exports of ordinary metals and their products in 2023, which includes cast iron, iron, steel and their products, in addition to other metals such as copper, nickel, and aluminium. It is the second largest item in terms of exports.

• $376 million

It is the value of exports of food, beverage and tobacco industry products, and it is the third largest item in terms of exports.