Lebanon Businessnews News
 

Capital inflows downby 20 percent in H1
Bigger trade deficit and lower cash inflows
double up payments' balance deficit
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The balance of payments’ deficit grew to $1 billion in the first half of 2012, almost two times as high as the $480 million recorded in the same period last year.

The deficit resulted from a decline of $2 billion in net foreign assets held by commercial banks, which had offset a $1 billion rise in net foreign assets of the Central Bank.

“Net capital inflows have dropped by 20 percent this year compared to previous years,” said Walid Issa, Chief Financial Officer at BLF.

Remittances from expatriates are one of the main sources for capital inflows. “Capital transfers from Lebanese in the Arab Gulf countries, Europe, and in Africa have all dropped this year,” said Issa. He said the global financial crisis that has affected all these countries in previous years has now come to Lebanon: “The world crisis is hitting us hard this year though with a delay.”

Issa said the high balance of payment deficit was also triggered by a growth in the trade deficit. Imports grew by 18 percent to $10.8 billion y-o-y in the first half. Exports were almost unchanged at $2 billion.

Reported by Hanadi Chami
Date Posted: Aug 09, 2012
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