A worker loads dough at a bakery in Beirut, Lebanon, where business conditions continue to deteriorate. Bloomberg
A worker loads dough at a bakery in Beirut, Lebanon, where business conditions continue to deteriorate. Bloomberg
A worker loads dough at a bakery in Beirut, Lebanon, where business conditions continue to deteriorate. Bloomberg
A worker loads dough at a bakery in Beirut, Lebanon, where business conditions continue to deteriorate. Bloomberg

Business

Economy

Lebanon’s business conditions deteriorate in October as hyperinflation persists

Weak purchasing power and rising prices lead to reduction in output and new orders

Deepthi Nair
Deepthi Nair

November 03, 2022

  • English
  • Arabic

Lebanon’s private sector continued to show a deterioration in business conditions in October as output and new orders declined amid persistent hyperinflation, challenging financial conditions, political uncertainty and weak domestic purchasing power.

The Blom Lebanon Purchasing Managers’ Index rose to 49.1 in October, from September’s four-month low of 48.8.

A reading above the neutral level of 50 indicates growth while one below it points to a contraction.

“The private sector in Lebanon revealed signs of improvement for the month of October, yet it operated relatively under serious challenging conditions,” said Aline Azzi, research analyst at Blominvest Bank.

“Surprisingly, a lower Lebanese exchange rate has not stimulated higher exports as new export orders dropped, while output and new orders increased, yet remained below the 50 threshold.”

Lebanon is in the grip of an economic crisis described by the World Bank as one of the worst in modern history.

In September, the International Monetary Fund called on Lebanese authorities to put in place critical structural and financial reforms, a pre-requisite to securing $3 billion of assistance from the lender that is expected to help the country emerge from the economic crisis.

Securing IMF backing will help to unlock a further $11bn of assistance that was pledged at a Paris donor conference in 2018, which is also tied to a slew of reforms.

Lebanon recorded its 26th consecutive month of triple-digit inflation in August, with the Central Administration of Statistics’ Consumer Price Index rising to 162 per cent from the same month a year earlier.

The country is expected to post the second-highest inflation rate in the world this year, trailing only Sudan, according to Fitch Solutions.

Lebanon’s economy collapsed after it defaulted on Eurobonds worth about $31bn in March 2020, with its currency sinking more than 90 per cent against the dollar on the black market.

Demand conditions worsened during October as a result of weak client purchasing power and rising prices, the Blom Bank survey showed.

The Lebanese pound’s unfavourable exchange rate against the US dollar continues to exacerbate inflationary pressures.

New orders from overseas markets declined owing to inflationary pressures in October.

Companies increased selling charges because of the rising cost of the US dollar and as they sought to pass on expenses to clients, although it was the softest rise since July.

Challenging financial conditions also restricted output volumes at some companies, the survey found.

Companies facing liquidity issues decreased their purchasing activity and stock levels.

____________

Lebanese banks to close amid hold-ups by depositors — in pictures

A Lebanese policeman stands guard next to a bank window broken by depositors who had demanded access to their money. An activist group said it will continue to organise bank raids to help people retrieve their trapped savings. AP photo
A Lebanese policeman stands guard next to a bank window broken by depositors who had demanded access to their money. An activist group said it will continue to organise bank raids to help people retrieve their trapped savings. AP photo
A closed Byblos Bank branch, where a man was reportedly detained after allegedly holding up the bank to access his own savings, in Ghazieh, Lebanon. Reuters
A closed Byblos Bank branch, where a man was reportedly detained after allegedly holding up the bank to access his own savings, in Ghazieh, Lebanon. Reuters
A man identified as Abed Soubra inside a Blom Bank branch, in the Tariq Al Jdideh neighbourhood of Beirut. Reuters
A man identified as Abed Soubra inside a Blom Bank branch, in the Tariq Al Jdideh neighbourhood of Beirut. Reuters
Lebanese depositors inside a Blom Bank branch in Beirut. A group of customers, at least one of whom was armed, took hostages in the bank, demanding access to their savings. They were reportedly able to withdraw $20,000 from an account of one of the depositors before they left. EPA
Lebanese depositors inside a Blom Bank branch in Beirut. A group of customers, at least one of whom was armed, took hostages in the bank, demanding access to their savings. They were reportedly able to withdraw $20,000 from an account of one of the depositors before they left. EPA
An armed woman and a dozen activists reportedly broke into a Beirut bank branch to retrieve more than $13,000 from what she said were her trapped savings. Lebanon's cash-strapped banks since 2019 have imposed strict limits on withdrawals of foreign currency, tying up the savings of millions. AP Photo
An armed woman and a dozen activists reportedly broke into a Beirut bank branch to retrieve more than $13,000 from what she said were her trapped savings. Lebanon's cash-strapped banks since 2019 have imposed strict limits on withdrawals of foreign currency, tying up the savings of millions. AP Photo
A woman, identified as Sally Hafez, appears to be carrying a gun at a Blom Bank branch in Beirut, in this screengrab taken from Al Jadeed footage. Reuters
A woman, identified as Sally Hafez, appears to be carrying a gun at a Blom Bank branch in Beirut, in this screengrab taken from Al Jadeed footage. Reuters
A woman is comforted as she is seen through a shattered window of a Blom Bank branch after a hostage-taking incident. Reuters
A woman is comforted as she is seen through a shattered window of a Blom Bank branch after a hostage-taking incident. Reuters
An ATM is covered with diesel fuel, vandalised by angry depositors. AP photo
An ATM is covered with diesel fuel, vandalised by angry depositors. AP photo
Members of the Lebanese security forces stand around a toy gun allegedly used by depositors in a hostage-taking situation, at a Blom Bank branch in Beirut. EPA
Members of the Lebanese security forces stand around a toy gun allegedly used by depositors in a hostage-taking situation, at a Blom Bank branch in Beirut. EPA
People gather near a Blom Bank branch during an hostage-taking situation in Beirut. EPA
People gather near a Blom Bank branch during an hostage-taking situation in Beirut. EPA

Employment levels and backlogs of work decreased fractionally in October, while disruptions at ports contributed to supplier delays.

Business confidence remained in negative territory, with companies anticipating uncertainty about the political and economic environment.

“Short term, cautious positivity would be on the horizon. Nevertheless, the financial and economic crises in the country remain a major challenge for the government,” Ms Azzi said.

The country was officially in another power vacuum on Sunday as Michel Aoun left the presidential palace, with parliament yet to decide on his successor.

Political impasses have previously led to political vacuums in the country and stalled its economic progress.

Lebanon was without a president for two and a half years until Mr Aoun’s election by the 128-seat Parliament in 2016. His predecessor, Michael Sleiman, was elected in 2008 after the position had been vacant for 18 months.

On Women's Day
CHATGPT%20ENTERPRISE%20FEATURES
%3Cp%3E%E2%80%A2%20Enterprise-grade%20security%20and%20privacy%3C%2Fp%3E%0A%3Cp%3E%E2%80%A2%20Unlimited%20higher-speed%20GPT-4%20access%20with%20no%20caps%3C%2Fp%3E%0A%3Cp%3E%E2%80%A2%20Longer%20context%20windows%20for%20processing%20longer%20inputs%3C%2Fp%3E%0A%3Cp%3E%E2%80%A2%20Advanced%20data%20analysis%20capabilities%3C%2Fp%3E%0A%3Cp%3E%E2%80%A2%20Customisation%20options%3C%2Fp%3E%0A%3Cp%3E%E2%80%A2%20Shareable%20chat%20templates%20that%20companies%20can%20use%20to%20collaborate%20and%20build%20common%20workflows%3C%2Fp%3E%0A%3Cp%3E%E2%80%A2%20Analytics%20dashboard%20for%20usage%20insights%3C%2Fp%3E%0A%3Cp%3E%E2%80%A2%20Free%20credits%20to%20use%20OpenAI%20APIs%20to%20extend%20OpenAI%20into%20a%20fully-custom%20solution%20for%20enterprises%3C%2Fp%3E%0A
DUBAI%20BLING%3A%20EPISODE%201
%3Cp%3E%3Cstrong%3ECreator%3A%20%3C%2Fstrong%3ENetflix%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EStars%3A%20%3C%2Fstrong%3EKris%20Fade%2C%20Ebraheem%20Al%20Samadi%2C%20Zeina%20Khoury%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3ERating%3A%3C%2Fstrong%3E%202%2F5%3C%2Fp%3E%0A
Dhadak 2

Director: Shazia Iqbal

Starring: Siddhant Chaturvedi, Triptii Dimri 

Rating: 1/5

Neighbourhood Watch
Read more
While you're here...
The specs: Macan Turbo

Engine: Dual synchronous electric motors
Power: 639hp
Torque: 1,130Nm
Transmission: Single-speed automatic
Touring range: 591km
Price: From Dh412,500
On sale: Deliveries start in October

Our legal consultants

Name: Hassan Mohsen Elhais

Position: legal consultant with Al Rowaad Advocates and Legal Consultants.

SPEC%20SHEET%3A%20APPLE%20M3%20MACBOOK%20AIR%20(13%22)
%3Cp%3E%3Cstrong%3EProcessor%3A%3C%2Fstrong%3E%20Apple%20M3%2C%208-core%20CPU%2C%20up%20to%2010-core%20CPU%2C%2016-core%20Neural%20Engine%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EDisplay%3A%3C%2Fstrong%3E%2013.6-inch%20Liquid%20Retina%2C%202560%20x%201664%2C%20224ppi%2C%20500%20nits%2C%20True%20Tone%2C%20wide%20colour%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EMemory%3A%3C%2Fstrong%3E%208%2F16%2F24GB%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EStorage%3A%3C%2Fstrong%3E%20256%2F512GB%20%2F%201%2F2TB%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EI%2FO%3A%3C%2Fstrong%3E%20Thunderbolt%203%2FUSB-4%20(2)%2C%203.5mm%20audio%2C%20Touch%20ID%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EConnectivity%3A%3C%2Fstrong%3E%20Wi-Fi%206E%2C%20Bluetooth%205.3%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EBattery%3A%3C%2Fstrong%3E%2052.6Wh%20lithium-polymer%2C%20up%20to%2018%20hours%2C%20MagSafe%20charging%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3ECamera%3A%3C%2Fstrong%3E%201080p%20FaceTime%20HD%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EVideo%3A%3C%2Fstrong%3E%20Support%20for%20Apple%20ProRes%2C%20HDR%20with%20Dolby%20Vision%2C%20HDR10%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EAudio%3A%3C%2Fstrong%3E%204-speaker%20system%2C%20wide%20stereo%2C%20support%20for%20Dolby%20Atmos%2C%20Spatial%20Audio%20and%20dynamic%20head%20tracking%20(with%20AirPods)%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EColours%3A%3C%2Fstrong%3E%20Midnight%2C%20silver%2C%20space%20grey%2C%20starlight%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EIn%20the%20box%3A%3C%2Fstrong%3E%20MacBook%20Air%2C%2030W%2F35W%20dual-port%2F70w%20power%20adapter%2C%20USB-C-to-MagSafe%20cable%2C%202%20Apple%20stickers%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EPrice%3A%3C%2Fstrong%3E%20From%20Dh4%2C599%3C%2Fp%3E%0A
More on animal trafficking
Infiniti QX80 specs

Engine: twin-turbocharged 3.5-liter V6

Power: 450hp

Torque: 700Nm

Price: From Dh450,000, Autograph model from Dh510,000

Available: Now

The Indo-Pacific
RESULTS

5pm Wathba Stallions Cup Maiden (PA) Dh70,000 (Dirt) 1,400m

Winner Munfared, Fernando Jara (jockey), Ahmed Al Mehairbi (trainer)

5.30pm Handicap (PA) Dh70,000 (D) 1,600m

Winner Sawt Assalam, Szczepan Mazur, Ibrahim Al Hadhrami

6pm Maiden (PA) Dh70,000 (D) 1,800m

Winner Dergham Athbah, Pat Dobbs, Mohamed Daggash

6.30pm Handicap (PA) Dh70,000 (D) 1,800m

Winner Rajee, Fernando Jara, Majed Al Jahouri

7pm Conditions (PA) Dh80,000 (D) 1,800m

Winner Kerless Del Roc, Fernando Jara, Ahmed Al Mehairbi

7.30pm Handicap (TB) Dh70,000 (D) 2,000m

Winner Pharoah King, Pat Dobbs, Doug Watson

8pm Conditions (PA) Dh85,000 (D) 2,000m

Winner Sauternes Al Maury, Dane O’Neill, Doug Watson

On Women's Day
The five pillars of Islam

1. Fasting 

2. Prayer 

3. Hajj 

4. Shahada 

5. Zakat 

GULF MEN'S LEAGUE

Pool A Dubai Hurricanes, Bahrain, Dubai Exiles, Dubai Tigers 2

Pool B Abu Dhabi Harlequins, Jebel Ali Dragons, Dubai Knights Eagles, Dubai Tigers

 

Opening fixtures

Thursday, December 5

6.40pm, Pitch 8, Abu Dhabi Harlequins v Dubai Knights Eagles

7pm, Pitch 2, Jebel Ali Dragons v Dubai Tigers

7pm, Pitch 4, Dubai Hurricanes v Dubai Exiles

7pm, Pitch 5, Bahrain v Dubai Eagles 2

 

Recent winners

2018 Dubai Hurricanes

2017 Dubai Exiles

2016 Abu Dhabi Harlequins

2015 Abu Dhabi Harlequins

2014 Abu Dhabi Harlequins

Zayed Sustainability Prize
While you're here
EA Sports FC 25
On Women's Day
While you're here

White hydrogen: Naturally occurring hydrogenChromite: Hard, metallic mineral containing iron oxide and chromium oxideUltramafic rocks: Dark-coloured rocks rich in magnesium or iron with very low silica contentOphiolite: A section of the earth’s crust, which is oceanic in nature that has since been uplifted and exposed on landOlivine: A commonly occurring magnesium iron silicate mineral that derives its name for its olive-green yellow-green colour

Pearls on a Branch: Oral Tales
​​​​​​​Najlaa Khoury, Archipelago Books

Abu Dhabi Sustainability Week
How the bonus system works

The two riders are among several riders in the UAE to receive the top payment of £10,000 under the Thank You Fund of £16 million (Dh80m), which was announced in conjunction with Deliveroo's £8 billion (Dh40bn) stock market listing earlier this year.

The £10,000 (Dh50,000) payment is made to those riders who have completed the highest number of orders in each market.

There are also riders who will receive payments of £1,000 (Dh5,000) and £500 (Dh2,500).

All riders who have worked with Deliveroo for at least one year and completed 2,000 orders will receive £200 (Dh1,000), the company said when it announced the scheme.

Dengue%20fever%20symptoms
%3Cp%3EHigh%20fever%20(40%C2%B0C%2F104%C2%B0F)%3Cbr%3ESevere%20headache%3Cbr%3EPain%20behind%20the%20eyes%3Cbr%3EMuscle%20and%20joint%20pains%3Cbr%3ENausea%3Cbr%3EVomiting%3Cbr%3ESwollen%20glands%3Cbr%3ERash%26nbsp%3B%3C%2Fp%3E%0A

Fifa Club World Cup:

When: December 6-16
Where: Games to take place at Zayed Sports City in Abu Dhabi and Hazza bin Zayed Stadium in Al Ain
Defending champions: Real Madrid

HOW DO SIM CARD SCAMS WORK?

Sim swap frauds are a form of identity theft.

They involve criminals conning mobile phone operators into issuing them with replacement Sim cards, often by claiming their phone has been lost or stolen 

They use the victim's personal details - obtained through criminal methods - to convince such companies of their identity.

The criminal can then access any online service that requires security codes to be sent to a user's mobile phone, such as banking services.

Updated: November 03, 2022, 1:50 PM
LebanonEconomyInflationBeirut