BEIRUT, Sept. 18 (Xinhua) -- Experts called on Lebanese authorities to strengthen industry and agriculture sectors to increase exports and further reduce the trade deficit, which has seen a contraction of nearly 6 percent to 8.2 billion U.S. dollars in the first seven months of 2023 compared to a year earlier.
"The government must secure adequate infrastructure such as electricity, in addition to tax incentives, to attract foreign companies to invest in Lebanon and contribute to the country's industrial and agricultural growth," said Bassem El-Bawab, a business instructor at the American University of Beirut.
He added that "such initiatives would reduce Lebanon's imports and increase the country's ability to export as it would then have a competitive production cost, which would help further narrow the trade deficit."
Nassib Ghobril, an economist and head of the economic research department at Byblos Bank, echoed El-Bawab's opinion, saying it is essential to focus on exports to decrease the trade deficit, as imports can hardly be reduced since Lebanon is reliant on importing raw materials to develop its industry sector.
Ghobril said Lebanese authorities must support not only the export of products but also of services. "We can focus more on tourism, banking, and outsourcing services," he added.
According to a weekly publication by Byblos Bank, Lebanon's total imports reached 9.8 billion dollars in the first seven months of 2023, registering a decrease of 9.3 percent from 10.8 billion dollars in the same period of 2022, while aggregate exports totaled 1.6 billion dollars, down by 24 percent from 2.1 billion dollars recorded in the same period last year.
"As the data show, the trade deficit narrowed by 5.7 percent to 8.2 billion dollars in Jan.-July 2023 from the same period last year," said the report.
Ghobril noted that the imports in 2022 were exceptionally high due to the increase in prices of petroleum, metals, and grains caused by the Russia-Ukraine conflict. It was also driven up by merchants stockpiling imported goods in last year at a lower customs dollar rate.
"The import bill dropped in 2023 because prices of petroleum and commodities went down, and importers in Lebanon, who already bought their goods in 2022, have had sufficient stocks of products for this year," he said.
El-Bawab said the reasons behind the drop in imports in 2023 also include the decline in the purchasing power of citizens who are no longer capable of consuming the same quality and quantity of products as before the financial crisis, which has shown no sign of improvement since it began to loom in 2019.
