Industrial exports to the United States have touched $1.79 billion in the first five months of 2018, reads a report from Lebanon’s Government.
According to Fadi Gemayel, the head of the Association of Lebanese Industrialists, the bulk of this industrial exports can be attributed to the entrepreneurial success of Lebanese industrialist who have been able to increase the footprint of their products in new markets. “Industrialists have made great efforts in exploring new markets for their products,” said Gemayel.
According to a report from Lebanon’s Industry Ministry, chemicals accounted for the bulk of Lebanese exports followed closely by food, tobacco, electrical equipment and basic metals.
In the past few years, Lebanon’s industrial exports have witnessed recessions following the closure of the only functioning crossing between Jordan and Syria, a vital link for the transportation of goods from Lebanon to other Gulf countries.
In recent weeks, after Syrian government forces took control of the border after a three years of closure, Lebanon’s industrial exports saw a rise since the country’s entrepreneurs were able to again export their products.
As a result of these exports, the country’s trade deficit narrowed by 6.1% to $5.3 billion in the first four months of this year in comparison to the same period in the previous year.
According to Byblos Bank, Lebanon’s industrial exports contributed to the drop in deficit to the year-on-year decrease of 240 million dollars in imports while the country’s exports, for the first four months, increased to $105.2 million.
According to Nassib Ghobril, chief economist and head of the Economic Research and Analysis Department at Byblos Bank, a decrease in the import of cars and food during this period by 9% and 8%, respectively, can be attributed to a drop in the purchasing power of people.
“The purchasing power of people has weakened following the government’s increase in the Value Added Tax (VAT) from 10 percent to 11 percent in addition to a high inflation rate of 6 percent,” said Ghobril.
According to Ghobril, a possible way to boost Industrial exports and reduce Lebanon’s imports is by slashing operating costs for manufacturers; this will not only boost local production but also improve competitiveness.
“People will then consume more local products while we will be able to export more of our produce,” noted Ghobril.