CONSUMERS UPBEAT AS TOURISTS FLOCK TO LEBANON

N 51 December 2016 Page 3 Lebanese trade flows picked up in the third quarter of 2016 Page 4 Swap operations achieved objectives, BdL says Page 5 Fiscal deficit widens to $2.5bn through August 2016 Page 6 Foreign operations lift profits at Alpha Group banks in Q3 2016 Page 7 Latest data for Lebanon s key economic sectors Page 8 Key trends in the Lebanese economy CONSUMERS UPBEAT AS TOURISTS FLOCK TO LEBANON Consumer confidence jumped to a multi-year high in October Retail activity picked up in the third quarter Growth in public revenues indicates resilient economic activity Consumers were upbeat in the aftermath of a political deal that saw the successful completion of the presidential elections at the end of October and the designation of a new Prime Minister. An index of consumer confidence published by ARA Marketing Research & Consultancy surged to 156 points in October, its highest level since the collapse of PM Hariri s national unity cabinet in January 2011. In particular, confidence in the security situation and in future personal income rode high as consumers pinned their hopes on a speedy economic recovery. Elections helped bring a thaw in political relations between Lebanon and Saudi Arabia, reviving hopes for the return of Gulf tourists to the country. Just 59,471 tourists from the six Gulf Cooperation Council countries visited Lebanon in the first nine months of 2016, their lowest level for the period in at least 15 years. Other tourists are already flocking into the country amid renewed confidence in security and economic prospects. Tourist arrivals climbed by 21% yoy in September, bringing the total in the first nine months to 1.3 million tourists, the most for the period since 2010. Renewed economic momentum was already underway during the summer with the real retail trade index compiled by Beirut Trade Associations showing a 9.2% sequential increase to 53.4 points in the third quarter. At the same time, the consumer price index increased by 1.1% yoy by October, its fastest pace in two years following a rebound in oil prices in recent months. Inflation is expected to rise at a quickening pace through 2019, starting with 2% in 2017, stated Standard & Poor s, a ratings agency, in a September note. Growing local demand was met with 1.2 billion KWH of electricity production in August 2016, an all-time high, as the state-owned electricity company brought more of its newly-installed capacity online. ext.11210 Consumer confidence (12m moving avg.) 300 Total Security Income 250 200 150 100 50 12/2011 02/2013 04/2014 06/ 08/2016 Source: ARA, Economena, SGBL Research Consumer price index (%yoy) 12% Total 1 1 Food and beverage 8% 8% 6% 6% 4% 4% 2% 2% -2% -4% -2% -6% -4% Oct-10 Oct-12 Oct-14 Oct-16 Source: CAS, Economena, SGBL Research

CENTRAL BANK ADDS MOMENTUM TO THE ECONOMY Robust lending by Lebanese banks provided considerable impetus for economic activity, supported by Banque du Liban s (BdL) stimulus packages. Commercial bank loans to the resident private sector grew by 7.2% yoy to $50.2bn by September 2016, a net production of $2.2bn in the first nine months of the year. As a result, Lebanon s Alpha Group banks, the 14 lenders with more than $2bn in deposits, posted record profits of $1.6bn in the first nine months of 2016, a 9.7% jump over the same period in, according to data compiled by Bankdata Financial Services. BdL announced an additional $995m in stimulus funds for 2017. BdL has announced an additional $995m in stimulus funds for 2017, which will help keep loan growth strong in coming months, particularly for housing and productive sectors. In addition, the Central Bank s swap operations in recent months strengthened confidence in the financial system despite regional instability. With foreign currency pouring in from Lebanese banks, the Central Bank s foreign currency gross reserves surged to $34.2bn at the end of September from $30.6bn at the end of, while swinging the balance of payments into a surplus of $555m in the first nine months of 2016. Meanwhile, the banking sector s foreign currency deposits outside Lebanon dropped by 11.8% yoy to $9.1bn by September 2016 Gains from swap operations also extended to the government s debt profile. The Central said in November that its operations involved a reduction in interest rates on 5-year Treasury bills to 5% from a previous primary market rate of 6.74%. Debt service costs widened to $2.8bn in the first eight months of 2016. The government is likely to tap into financial markets in coming months in order to refinance a $1.5bn Eurobond maturing in March 2017. Furthermore, Parliament authorized in October additional borrowing of up to $3bn in foreign currency, paving the way for fresh Eurobond issues by the government to meet its foreign currency needs. Debt service costs widened to $2.8bn in the first eight months of 2016, an increase of $163.7m over the same period in amid acceleration in the debt stock and increased reliance on the more expensive longer-term debt instruments. However, the government has also been able to grow its revenues despite a sluggish economy. Public revenues grew by 4.1% yoy to $6.9bn through August, driven by additional Treasury receipts from municipalities and a larger surplus at the Ministry of Telecommunications. LABOR AND EXPORTS ARE STILL WEAK Positive political developments have yet to filter through to the labor market as firms remain cautious in their hiring trends. An estimated 3.5% of surveyed business managers reported a decrease in employment levels in their units in October, the biggest proportion in almost three years, data from the monthly Purchasing Managers Index survey showed. The downward trend in employment doesn t appear to be pinching businesses equally. Taxes on wages and salaries increased by 5.2% yoy to $357.7m in the first eight months, indicating healthy aggregate payroll growth at Lebanese businesses. Exports rose by 23.6% yoy to $841.5m in the third quarter of 2016. Meanwhile, Lebanon s trade activity regained some of its lost ground in the third quarter, but the downward trend that took hold with the start of the conflict in Syria in 2011 will likely take longer to reverse. Exports rose by 23.6% yoy to $841.5m in the third quarter of 2016, their fastest quarterly pace since 2010, but have remained in the red in the first nine months of the year. Lebanon s exporters have been virtually cut off from their main Gulf consumers by land following the closure of the Nassib border crossing between Syria and Jordan in. Imports, however, have been less vulnerable given the country s dependence on China, Europe, and the ed States for the bulk of its foreign merchandise. Claims on non-resident financial sector () Retail Trade Index 20 18 16 18.0 55.6 54.5 58.4 52.8 53.8 55.3 55.4 53.4 14 12 49.2 48.9 10 9.1 8 Sep 10 Sep 12 Sep 14 Sep 16 Source: ABL, Economena, SGBL Research 2q14 3q14 4q14 1q15 2q15 3q15 4q15 1q16 2q16 3q16 Source: BTA, Economena, SGBL Research

INSURANCE LEBANESE TRADE FLOWS PICKED UP IN THE THIRD QUARTER OF 2016 Export activity rebounded by 23.6% yoy to $841.5m in the third quarter Falling regional trade is hurting trade finance activities at banks SMEs among the most vulnerable to de-risking Lebanon s trade activity regained some of its lost ground in the third quarter, but the downward trend that took hold with the start of the conflict in Syria in 2011 will likely take longer to reverse. Exports rose by 23.6% yoy to $841.5m in the third quarter of 2016, their fastest quarterly pace since 2010, but remained in the red in the first nine months of the year. Lebanon s exporters have been virtually cut off from their main Gulf consumers by land following the closure of the Nassib border crossing between Syria and Jordan in. Imports, however, have been less vulnerable given the country s dependence on China, Europe, and the ed States for the bulk of its foreign merchandise. Imports picked up by 9.2% yoy to $4.9bn in the third quarter, riding largely on an uptick in oil prices since the start of the year and rejuvenation in the trade of pearls and precious metals. Imports of vehicles and pharmaceuticals also took a turn for the better in the first nine months of the year, rising by 7.5% yoy to $1.3bn and by 9.8% yoy to $916.3m respectively. Imports of vehicles and pharamceuticals took a turn for the better in the first nine months. The slump in exports and slowdown in imports in the early months of the year are starting to pinch Lebanese banks trade finance activities. Letters of credit opened for exports fell by 33% yoy to $1.7bn in the 12 months to August 2016, while those for imports saw a milder decrease of 9.7% yoy to $4.9bn over the same period. Lebanese banks, however, are not alone in their trade finance woes. Regional turmoil has hurt trade flows between Arab countries altogether and complicated logistics, driving up the cost of insurance to, in certain cases, prohibitive levels. The Middle East and North Africa s merchandise trade fell in to 65.4% of GDP, its lowest level since 2009, according to the World Bank. Meanwhile, heightened global risks are increasing demand for trade-risk coverage products amid an increased perception of commercial, bank, and country risk in global trade markets, stated the International Chamber of Commerce, with SMEs bearing the lion s share of rejected trade finance proposals. Heightened global risks are increasing demand for trade-risk coverage products. De-risking by global banks, coupled with a rising sense of nationalism and anti-globalization forces in the ed Kingdom and the ed States may bode ill for global trade flows and trade finance, causing disruption to cross border supply chain operations. However, as global banks pull back, regional ones are poised to pick up the slack, with Lebanese banks standing to benefit from their sprawling network of branches and subsidiaries across the Middle East to facilitate regional and international trade finance. Documentary L/Cs: opened credits () 8 8 7 Import Export 7 6 6 5 5 4 4 3 3 2 2 1 1 0 0 Aug-01 Aug-06 Aug-11 Source: ABL, Economena, SGBL Research MENA merchandise trade (% of GDP) 8 77. 75% 7 65% 65.4% 6 55% 5 45% 4 1990 1995 2000 2005 2010 Source: WB, Economena, SGBL Research

BANKING SWAP OPERATIONS ACHIEVED OBJECTIVES, BANQUE DU LIBAN SAYS BdL foreign assets hit a record high as banks load up on US Dollar CDs Sovereign debt profile improved post-operations Banks deposits abroad dropped by 11.8% yoy to $9.1bn by September 2016 The Central Bank said in November that the objectives targeted by its financial engineering mechanism have been achieved, citing improvement in more than half a dozen key indicators in the country. Banque du Liban (BdL) had embarked in May on a series of swap operations with the Ministry of Finance (MoF) on one hand and with the financial sector on the other, in a bid to prop up dwindling foreign reserves after five consecutive years of deficit in the country s balance of payments. BdL stated that its operations involved swapping $2bn worth of Treasury bills for their equivalent in Eurobonds held by MoF, and then selling them to banks along with an undisclosed amount of dollar-denominated Certificates of Deposit. At the same time, the Central Bank purchased from banks Treasury bills and local currency CDs worth the total value of the Eurobonds and US Dollar CDs it sold. In total, the Central Bank issued $8.7bn in US Dollar Certificates of Deposit in the first nine months of 2016, bringing the total outstanding amount to $17.8bn. Alpha banks, those with over $2bn in deposits, held 72.5% of the total, equivalent to $12.9bn by September, according to Bankdata Financial Services. The Central Bank issued $8.7bn in US Dollar CDs in the first nine months of 2016. With foreign currency pouring in from Lebanese banks, the Central Bank s foreign currency gross reserves surged to $34.2bn at the end of September from $30.6bn at the end of. Meanwhile, the banking sector s foreign currency deposits outside Lebanon dropped by 11.8% yoy to $9.1bn by September 2016, as banks moved some of their foreign currency assets to Lebanon to take advantage of attractive returns through the Central Bank s financial operations. The Central Bank s operations helped boost confidence by expanding its gross foreign reserves, reducing the cost of debt for the Lebanese government, and increasing the banking sector s capital position, stated the World Bank in its fall 2016 issue of the Lebanon Economic Monitor. The Central Bank said that its operations helped improve the government s debt profile by decreasing interest rates on 5-year Treasury bills to 5% from 6.74% previously, while simultaneously cutting rates on its long-term local currency CDs and time deposits to 8.4% from 9%. The Central Bank decreased interest rates on 5-year Treasury bills to 5% from 6.74%. Furthermore, BDL instructed banks to book the proceeds from the recent financial mechanism in their Tier II capital, which would enable them to constitute additional general reserves ahead of the implementation of IFRS 9 in January 2018 and a capital adequacy ratio of 15% by 2018. BdL $ CDs with Alpha Group banks 12.9 6.5 5.5 5.6 5.6 4.7 3.4 3.9 3.9 4.6 3.4 q1 14 q3 14 q1 15 q3 15 q1 16 q3 16 Source: Bankdata, Economena, SGBL Research BdL foreign currency assets () 40 35 30 25 20 15 10 5 0 Sep-04 Sep-07 Sep-10 Sep-13 Sep-16 Source: BdL, Economena, SGBL Research

TOURISM FISCAL DEFICIT WIDENS TO $2.5BN THROUGH AUGUST 2016 Government spent $812.3m more in the first 8 months of 2016 Rising revenues point to resilient economic activity Public debt accelerated but market debt ratios are stable Lebanon s fiscal deficit widened by 27.1% yoy to $2.5bn in the first eight months of 2016, the second largest expansion on record for the period, data by Ministry of Finance showed. The Lebanese government spent $812.3m more in the first 8 months of 2016 than the equivalent period in, wiping out revenue gains at a time of sluggish economic growth. Public revenues grew by 4.1% yoy to $6.9bn through August, driven by additional Treasury receipts from municipalities and a larger surplus at the Ministry of Telecommunications. Income taxes grew by 1.9% yoy to $1.6bn in the first eight months, with a 5.2% yoy increase in labor taxes to $357.7m indicating healthy payroll growth at Lebanese businesses. A 5.2% yoy increase in labor taxes to $357.7m indicates healthy payroll growth at Lebanese businesses. Income taxes, which include capital gains taxes, are expected to get a lift in coming months from the recent financial engineering mechanism conducted by the Central Bank on the back of gains to the tune of several billion dollars by Lebanese banks. The mechanism, however, also involved issuing additional Treasury bills, likely adding to the state s already burdensome debt service bill. Total spending grew by 9.5% yoy to $9.4bn through August, following an increase in the country s debt service costs and a rise in unallocated expenses attributed to budgets of previous years. On the other hand, transfers to the state-owned electricity company fell by $266.1m to $521.2m in the first eight months, reflecting lower global crude oil during the period relative to the same period in. Debt service costs widened to $2.8bn, an increase of $163.7m from the first eight months of amid acceleration in the debt stock and increased reliance on more expensive longer-term debt instruments. Gross public debt swelled by $4.4bn in the first nine months to $74.7bn by September, its second fastest pace in over two decades. Despite the rise in total debt figures, Lebanon s market debt to GDP, a ratio that excludes debt held by state or semi-state entities, has remained stable at 89% of GDP as of September 2016, according to estimates by Economena Analytics. Parliament authorized in October additional borrowing of up to $3bn in foreign currency, paving the way for fresh Eurobond issues in coming months. The government is expected to tap into financial markets to refinance a $1.5bn Eurobond maturing in March 2017. Lebanon s market debt to GDP has remained stable at 89% of GDP by September 2016. Standard & Poor s revised in September its outlook on Lebanon s sovereign debt to stable from negative citing resilient growth in private sector deposits which provide an important source of funding for the Lebanese government. The ratings agency forecast a widening in the fiscal deficit to 8.7% of GDP in 2016 from 7.8% in, but said the ratio would then stabilize in 2017. Fiscal deficit (Jan-Aug, ) Market debt (2016 through September) 2.6 2.5 1.7 1.7 1.8 1.5 1.5 1.7 1.8 2.0 1.7 1.5 1.5 1.2 1.1 1.0 50 45 40 35 30 Market debt () % of GDP 46.2 11 105% 10 95% 9 25 85% 2001 2004 2007 2010 2013 2016 Source: MoF, Economena, SGBL Research 20 8 2008 2010 2012 2014 2016* Source: MoF, Economena, SGBL Research

FOREIGN OPERATIONS LIFT PROFITS AT ALPHA GROUP BANKS IN Q3 2016 Net profits hit a record $1.6bn in the first nine months of 2016 Foreign activities paid off handsomely as profits doubled in the third quarter Loans in Lebanese Pound accelerated by 12.2% yoy through September Lebanon s Alpha Group banks, the 14 lenders with more than $2bn in deposits, posted record profits of $1.6bn in the first nine months of 2016, a 9.7% jump over the same period in, according to data compiled by Bankdata Financial Services. In particular, banks reported a massive 32.3% yoy increase in profits from foreign activities to $402m, contributing to a quarter of total profits for the year through September. Foreign profits nearly doubled in the third quarter alone, helping turn around performance at the banks foreign operations after a slow start of the year. On the other hand, domestic profits grew at a slower pace of just 4% yoy in the first nine months after a rise in operating expenses and in provisions brought about a 4.4% yoy drop in domestic net profits in the third quarter. A SURGE IN PROVISIONS AND OPERATING EXPENSES Net provisions for credit losses surged by 41.3% yoy to $348m in the first nine months, almost $102m more than the same period in, even as doubtful loans fell by 7 basis points to 5.72% of total loans. Five of the 14 Alpha Group banks more than doubled their provisioning during the first nine months, reflecting growing regulatory requirements and a difficult business environment. Operating expenses were also considerably higher in the first nine months, as banks ramped up their hiring and their administrative spending. Total operating spending grew by 20.8% yoy to $2.5bn by September, including just under $1.3bn in staff costs, an increase of 10.4% yoy in the latter. All but one of the Alpha Group banks increased their staff in the 12 months through September 2016, an aggregate addition of 749 employees to bring the total headcount to 31,148 staff. Alpha Group (Jan-Sep 2016) Net profit ($m) Assets () Bank Audi 350.3 45.3 BLOM Bank 344.1 30.1 Bank of Beirut 149.7 16.5 SGBL 121.5 18.1 Fransabank 121.0 20.4 BankMed 115.0 15.8 Byblos Bank 113.7 20.6 BLF 82.9 12.0 IBL Bank 59.4 6.5 Credit Libanais 52.6 10.5 BBAC 41.6 6.4 Creditbank 32.9 3.7 Lebanon and Gulf Bank 31.5 4.0 First National Bank 27.9 4.3 Alpha Group 1,644.0 214.2 Source: Bankdata Financial Services, Economena, SGBL Research DOMESTIC DEPOSITS REBOUNDED Domestic deposits rebounded in the third quarter after posting sluggish performance in the first half of the year. Banks moved substantial amounts from their foreign branches and subsidiaries to Lebanon to take advantage of the Central Bank s financial engineering mechanism, leading to acceleration in domestic dollar deposits by 7.4% yoy by September 2016, compared with growth of just 3.4% yoy by September. As a result, total domestic deposits increased by 6.2% yoy to $143.6bn, 63.5% of which in foreign currency. The Central Bank s financial engineering mechanism involved swapping $2bn worth of Treasury bills for their equivalent in Eurobonds held by MoF, and then selling them to banks along with an undisclosed amount of dollar-denominated CDs. The latest swap operations are estimated to have generated a windfall of several billion dollars in profits for Lebanese banks, but they are required to allocate much of those profits towards meeting IFRS 9 reserve requirements and boosting their capital adequacy through 2018. UPTICK IN LOCAL CURRENCY LOANS Despite the surge in their domestic dollar deposits, Alpha Group banks reported an uptick in their local currency loan portfolios, coupled with only tepid growth in foreign currency lending. The latter increased by 6.7% yoy to $33.2bn through September 2016, while lending in local currency jumped by 12.2% yoy to $12.6bn. The dollarization rate of loans to the resident private sector has been in decline for several years as banks increase their reliance on successive Central Bank stimulus packages. Growing loan portfolios in addition to slight widening in interest spreads were not enough to improve return ratios. Although the return on average common equity for the 14 Alpha Group banks inched up by 5 basis points to 12.85% by September, all but 4 of the banks saw their returns decrease over the period. Alpha Group net profit (Jan-Sep, ) 1.16 1.26 1.31 1.37 1.50 1.64 2011 2012 2013 2014 2016 Source: Bankdata Financial Services, Economena, SGBL Research

Key indicators Cleared cheques Real estate transactions Construction permits Cement deliveries Tourist arrivals Airport traffic Balance of payments Money supply: M3 BSE volumes Passenger car sales Hotel occupancy (average) Sqm, m Tons, m m m m % 69.62 8.01 12.34 5.04 1.52 7.24-3.36 123.62 74.64 39,361 56 5.83 0.72 0.98 0.52 0.18 0.92 1.79 128.15 8.67 3,418 63 Sep-16 3.83 0.73 0.93 0.48 0.16 0.82 0.19 129.12 17.49 3,017 70 Oct-16 0.61 1.02 0.55 22.97 2,562 54 %Y/Y YTD -33.32 44.93-11.78 6.73 11.31 9.99 3.45 3.89 20.99 1.30-3.75 6.46-0.55 5.76 5.49 552.25 96.28-29.63 31,141 0.00 58 PYTD 51.89 6.46 10.28 3.62 1.18 6.12-1.77 4.40 64.48 32,811 56 Indices Consumer Confidence Index - ARA Consumer Price Index Purchasing Managers' Index BdL Coincident Indicator 95.08 97.03 48.38 278.61 100.00 95.61 45.00 284.60 Sep-16 88.00 97.06 45.10 Oct-16 156.00 97.94 43.80 %Y/Y 97.47 1.13-7.01 6.75 %YTD 44.44 2.11-8.56-5.86 Trade Imports Exports Trade balance Port of Beirut volumes TEUs, m 18.07 2.95-15.12 1.13 Jul-16 1.45 0.25-1.20 1.95 0.34-1.61 0.10 Sep-16 1.45 0.25-1.19 %Y/Y 1.02 4.49 0.31-3.85 YTD 14.24 2.23-12.01 0.86 PYTD 13.22 2.23-10.99 0.86 Financial and monetary Commercial bank assets Claims on the resident private sector Claims on the non-resident private sector Claims on the public sector Resident private sector deposits Dollarization rate (average) Non-resident private sector deposits Dollarization rate (average) Private sector deposits with commercial banks Private loans / deposits Public sector deposits BdL foreign assets BSE market capitalization Gross public debt % % % 185.99 48.04 6.18 37.80 119.73 59.32 31.86 86.44 151.59 39.74 8.77 40.49 11.22 70.32 Jul-16 190.93 49.57 6.50 36.53 122.74 59.26 32.33 86.19 155.07 40.39 9.84 44.98 11.08 73.39 195.77 49.95 6.42 34.72 124.18 59.25 32.91 85.51 157.09 40.23 9.95 47.79 10.98 74.05 Sep-16 198.07 50.19 6.46 35.32 125.12 59.43 33.02 85.99 158.15 40.12 10.45 46.40 11.11 74.73 %Y/Y 9.23 7.20 11.62-5.47 5.70 0.33 7.44 0.13 6.06 0.56 25.70 9.47 0.83 8.74 YTD 12.08 2.15 0.28-2.48 5.39 59.19 1.17 86.02 6.56 40.27 1.68 5.92-0.11 4.40 %YTD 6.50 4.47 4.54-6.56 4.51 1.00 3.66 0.99 4.33 1.02 19.15 14.61-0.94 6.26 Public finance Revenues Value Added Tax Telecommunications Income taxes Customs taxes Expenditures Transfers to EdL Debt service Primary balance Fiscal balance 9.58 2.10 1.23 1.92 1.37 13.53 1.14 4.46 0.72-3.95 Jun-16 0.79 0.12 0.18 0.12 1.06 0.05 0.35 0.10-0.26 Jul-16 0.95 0.30 0.18 0.12 1.00 0.10 0.20 0.17-0.05 0.59 0.12 0.03 0.13 1.13 0.08 0.27-0.26-0.54 %Y/Y -19.38 8.34-56.31-60.29 13.54 31.40 62.68 11.83-318.99 313.71 YTD: year-to-date, PYTD: previous year-to-date. Source: MoF, BdL, BSE, ARA, Customs, Markit, EY, RHIA, CAS, Economena, SGBL Research YTD 6.88 1.48 0.80 1.58 0.92 9.40 0.52 2.81 0.41-2.53 PYTD 6.60 1.45 0.76 1.55 0.90 8.59 0.79 2.65 0.79-1.99

PMI - changes in employment at surveyed business units Positive political developments have yet to filter into the labor market as firms remain cautious in their hiring trends. An estimated 3.5% of surveyed business managers reported a decrease in employment levels in their units in October, the biggest proportion in almost three years. Population by district ( 000, 2014) Lebanon s population grew by an estimated 1.53% to 4.2 million in 2014, its slowest pace since 2007, data by the Ministry of Public Health showed. The fastest growth came from Akkar, Bint Jbeil, and Marjayoun at close to 3.5% each, 10 times faster than in Metn, Koura, Baabda, or Kesrouan. 5% 4% % Lower % Higher 5% 4% 3,5% Others, 1,470 Baabda, 486 Metn, 483 3% 3% 2% 2% Akkar, 287 1% 1% 10/2013 10/2014 10/ 10/2016 Zahle, 167 Kesrouan, 167 Chouf, 174 Sour, 230 Saida, 235 Tripoli, 285 Baalbeck, 248 Exports (12-month moving sum, $m) Source: PMI, Economena, SGBL Research As exports of heavy machinery struggle, those of consumer products are still thriving. Exports of tobacco and its substitutes surged by 32.6% yoy to $26.6m in the 12 months to September, while exports of animal / vegetables fats and oils jumped by 13.6% yoy to $37.7m over the same period. 36 32 28 24 Tobacco and substitutes Animal/Vegetable fats and oil 37.7 26.6 40 38 36 34 Source: MoPH, Economena, SGBL Research Tourist arrivals from the GCC ( 000, Jan-Sep) Signs of improvement in the ties between Lebanon and Saudi Arabia may help lift the number of tourist arrivals from Gulf Cooperation Council countries. Just 59,471 tourists from the Gulf visited Lebanon in the first nine months of 2016, the lowest for the period in at least 15 years. 232 246 320 207 155 110 170 319 296 171 126 20 32 67 73 84 59 16 30 Jan-15 Jun-15 Nov-15 Apr-16 Sep-16 Source: Customs, Economena, SGBL Research 2002 2004 2006 2008 2010 2012 2014 2016 Source: MoT, Economena, SGBL Research