IN THIS ISSUE ECONOMY

Transcription

1 IN THIS ISSUE ECONOMY Coincident Indicator Improves by 5.8% Y-O-Y in October 2013 Fiscal Deficit Widened by 32% to USD 3,519 Million in the First Ten Months of 2013 Trade Deficit Goes up on a Yearly Basis in the First Eleven Months of 2013 BANKING & FINANCE Central Bank s Assets Reach USD 77.0 Billion at Year-End 2013 with USD 35.3 Billion in Foreign Assets Deposits Denominated in Foreign Currencies Expanded by USD 372 Million during the Week of December 2013 BUSINESS Berytech to Announce a New Acceleration Program Alfa, a Local Mobile Operator, Joined the SAMENA Council Market & Economic Research Division Mazen Soueid Stephanie Ghanem Ziad Hariri Nadine Yamout Rita Nehme

2 ECONOMY COINCIDENT INDICATOR IMPROVES BY 5.8% Y-O-Y IN OCTOBER 2013 The coincident indicator, the composite indicator of economic activity in Lebanon as monitored by the Central Bank, reached points in October 2013, rising up by 5.8% from points recorded in the same month last year, and by 9.4% from points in September Overall, the twelve-month period from October 2012 to October 2013, witnessed four monthly declines in April 2013, June 2013, July 2013, and August The all-time highs were reached in March 2013 (273.9 points) and April 2012 (273.7 points). The coincident indicator is an average of 8 weighted economic indicators, including electricity production, cement deliveries, cleared checks, money supply M3, passenger flows, imports of petroleum derivatives, total imports, and exports. 280 BDL Coincident Indicator BDL, BankMed Research

3 FISCAL DEFICIT WIDENED BY 32% TO USD 3,519 MILLION IN THE FIRST TEN MONTHS OF 2013 Lebanon s total fiscal deficit reached USD 3,519 million in January-October 2013, going up by a yearly 32% from the USD 2,676 million deficit recorded in January-October In parallel, the primary balance, which excludes debt service payments, registered a deficit of USD 313 million in the first ten months of 2013, compared to a surplus of USD 434 million registered in the same period last year. Total revenues, including transfers from Telecom, decreased by a yearly 2% to reach USD 7,920 million in the first ten months of 2013, of which USD 7,463 million were budget revenues and USD 457 million treasury receipts. Of the total budget revenues, tax revenues amounted to USD 5,861 million in the aforementioned period, recording a yearly drop of 1.1%. VAT revenues remained almost stable y-o-y to reach USD 1,942 million in January-October 2013, while customs revenues dropped by 4.5% to USD 1,192 million. As for non-tax revenues, they recorded an 11% y-o-y decrease reaching USD 1,603 million, among which were USD 1,015 million in transfers from Telecom. On the spending side, total public expenditures increased by 6% to reach USD 11,439 million in January-October Transfers to EDL decreased by 4% year-on-year to reach USD 1,797 million in the same period, while interest payments increased by an annual 3.4% to reach USD 3,044 million. Treasury expenditures increased by 2.9% year-on-year to reach USD 2,467 million in January-October ,000 Fiscal Balance first ten months of the year (USD millions) -1,500-2,000-1, ,500-3,000-2, , , ,500-4,000-3, Ministry of Finance, BankMed Research

4 TRADE DEFICIT GOES UP ON A YEARLY BASIS IN THE FIRST ELEVEN MONTHS OF 2013 Lebanon s foreign trade deficit reached USD 15,616 million in January-November 2013, going up from USD 15,307 million recorded in the first eleven months of Imports registered a slight 0.12% y-o-y rise reaching USD 19,431 million along with a 6.9%% drop in exports to reach USD 3,815 million. In terms of country of origin, imports from China accounted for the largest share -of 10.6%- of Lebanon s total imports in January-November 2013, with a value of USD 2,060 million, followed by Italy with a share of 8.2%, then USA and France with respective shares of 7.3% and 7.1%. Imports of mineral products topped the list of Lebanese imports accounting for 24% of the total, followed by machinery & electrical instruments (12%), then products of the chemical (9%) and transport equipment (8%). As for country of destination, Syria took the largest share of exports from Lebanon, over the same period, accounting for 12.8% of the total (USD 491 million), followed by South Africa with an 10.4% share (USD 397 million), and Iraq with a 9.7% share (USD 371 million). Pearls, precious or semiprecious stones topped Lebanese exports accounting for 20% of the total, followed by base metals & articles of base metals and machinery & electrical instruments with respective shares of 13% and 12%, respectively. 0.0 Trade Balance first eleven months of the year (USD billions) Imports by Country of Origin first eleven months of 2013 China 10.6% Others 43.0% Italy 8.2% USA 7.3% France 7.1% Saudi Arabia 2.1% Switzerland 3.0% Egypt 3.1% Russia 4.2% Turkey 5.5% Germany 5.9% Lebanese Customs, BankMed Research

5 BANKING & FINANCE CENTRAL BANK S ASSETS REACH USD 77.0 BILLION AT YEAR-END 2013 WITH USD 35.3 BILLION IN FOREIGN ASSETS Banque du Liban (BDL) s bi-monthly balance sheet as of end-2013 reported total assets of USD 77.0 billion, indicating an increase of 0.4% from end-2012 (USD 76.7 billion) but going down by USD 1.5 billion from mid-december 2013 when they amounted USD 78.5 billion. Gold stood at USD 11.1 billion as of end-2013 dropping down by USD 197 million from mid- December 2013, and foreign assets dropped by USD 284 million to reach USD 35.3 billion in the same period. Loans to the local financial sector increased by USD 52 million from mid- December 2013 to reach USD 2.3 billion in the same period. With respect to liabilities, BDL reported an increase of 0.7% in financial sector deposits to reach USD 57.3 billion at end-2013, accounting for around 74% of total liabilities. On the other hand, public sector deposits dropped by USD 390 million, hence amounting to USD 7.3 billion in the same period. DEPOSITS DENOMINATED IN FOREIGN CURRENCIES EXPANDED BY USD 372 MILLION DURING THE WEEK OF DECEMBER 2013 On the monetary front, the overall money supply M4 increased by 0.4% during the week of December 2013 to around USD billion; and the non-banking sector treasury bills portfolio increased by USD 37.8 million over the preceding week. Lebanese Pound denominated deposits and currency in circulation M1 came in 0.05%- or USD 2.2 million- lower during the aforementioned week to around USD 4.7 billion; mainly due to a decrease in money in circulation by USD 47 million which was not offset by the rise in demand deposits by USD 45 million. Further, local currency term deposits M2 increased by USD 86 million during the week, and registered a twelve-month increase of 5.07%, to stand at USD 45.1 billion. Private sector term and saving deposits denominated in LBP (M2 - M1) went up by USD 88 million during the week to USD billion, while deposits denominated in foreign currencies (M3 - M2) expanded by USD 372 million during the week to USD billion.

6 Money Supply Week of December 2013 (billion USD) 12-Dec Dec-13 Absolute change over week M M M M M2-M M3-M M1 = Currency in Circulation + Demand Deposits in LBP M2 = M1 + Other deposits in LBP M3 = M2 + Deposits in FX M4 = M3 + TBs held by non banking system including accrued interests BDL, BankMed Research BUSINESS BERYTECH TO ANNOUNCE A NEW ACCELERATION PROGRAM Berytech, a local incubator and accelerator, will announce a new acceleration program which links Beirut to Silicon Valley incubators and accelerators, based in North California, USA. This program is expected to be launched as of the first quarter of 2014 addressing all ICT-oriented entrepreneurs and startups. This approach comes in line with efforts aiming at transforming Beirut into a digital capital in the region. Furthermore, Berytech will be launching its second fund, by mid This fund will focus on creative industries, particularly those related to digital content, movies, music, industrial design, fashion, and renewable energies. Berytech Fund II has budgeted USD 25 USD 35 million for potential inventive startups while Berytech Fund I had over USD 6 million under management.

7 ALFA, A LOCAL MOBILE OPERATOR, JOINED THE SAMENA COUNCIL Alfa, a local mobile operator, has joined the SAMENA (South Africa, Middle East North Africa) Council. The council is a telecom trade organization headquartered in the UAE which covers the abovementioned regions and encompasses more than 90 members, like Booz & Co, Deloitte, Oger Telecom, Etisalat, Huawei, Mobinil, Nokia Siemens Network, and Google. The Council provides a platform for ICT companies, regulatory authorities and professionals in order to address the opportunities and challenges of the industry. The SAMENA Council also offers opportunities for corporate branding on its website or through trade events. It is worth noting that the SAMENA Council started its strategy titled, Policy Board, in 2011 with the purpose to recommend and embrace strategic positions in the ICT industry.