Business conditions in Lebanon’s private sector hit a 10-year high in June despite the country's enduring economic crisis, soaring inflation and a political impasse that has held back billions of dollars from the International Monetary Fund and international donors.
The country's Blom purchasing managers’ index, a measure of the strength of its private sector, rose to 50.2 in June, from 49.4 in May.
This is the first improvement in the health of the private sector economy since August 2022, with growth hitting its highest level since June 2013, as new orders, employment and business activity posted renewed expansion.
A reading over 50 indicates an expansion in business conditions, while one below represents a contraction.
The reading for June was largely a reflection of business activity, employment and new orders increasing, while input cost inflation slowed to a 21-month low.
“The improvement was a long time in coming, but perhaps it was largely expected. The economy registered positive growth in 2022 and its momentum is carried over to 2023, especially with the onset of the tourist summer season,” said Ali Bolbol, the chief economist and head of research at Blom Bank.
“It is plain to see that the economy is adjusting upwards from its deep lows of the crisis years; but the worry is that these positive, tentative steps are viewed as ‘back to normal’, and consequently obviate the need for vital structural reforms that would underpin genuine, solid, and steady growth.”
New orders rose at the second-fastest rate in the PMI survey's history during June and to the greatest extent since May 2013. The improvement in demand reflected greater sales to domestic and foreign customers, according to the survey.
June's reading was the third consecutive monthly increase in new business received from non-domestic markets, which subsequently signalled the longest uninterrupted sequence of export demand growth since the survey began in 2013.
As a result of greater intakes of new business, Lebanon's private sector businesses recorded an increase in backlogs of work, with output levels raised to match workloads.
Employment levels in June increased as businesses raised capacity to accommodate greater sales.
For the first time since October 2019, there was a shortening of supplier delivery times in June.
Cost pressures subsided during June as input price inflation slowed.
Despite the positive developments, business confidence fell to a four-month low, with companies reporting concerns over the outlook caused by domestic political and economic uncertainty, according to the survey.
Inflation in Lebanon hit an annual rate of 260 per cent in May as a political impasse over the election of a president persisted, thwarting the enactment of reforms necessary for the country to emerge from its worst economic crisis.
Hyperinflation continued for the 35th consecutive month as the country's currency continued to lose value on the parallel and official markets since it was devalued by 90 per cent at the start of February.
The country is in the grip of an economic crisis described by the World Bank as one of the worst in modern history and has yet to enforce critical structural and financial reforms required to unlock $3 billion of assistance from the IMF, as well as billions in aid from other international donors.
The country has a caretaker cabinet led by Prime Minister Najib Mikati, with limited powers. It also needs to elect a president after the six-year term of Michel Aoun ended at the end of October, but this requires the consensus of the country's political elite.
Last month, the IMF said although Lebanon's economy showed some signs of stabilisation in 2022 due to a rebound in tourism, strong inflows of remittances and an improvement in trade in the second half of the year, it "remains severely depressed".
"Still, high uncertainty, banking sector restrictions, and expensive and very limited electricity supply continue to hinder economic activity," the fund said.
The country's economic outlook "is highly uncertain and depends on the authorities’ policy actions", it said.
Lebanon's economy contracted by about 58 per cent between 2019 and 2021, with gross domestic product falling to $21.8 billion in 2021, from about $52 billion in 2019, according to the World Bank – the largest contraction on a list of 193 countries.
The World Bank estimates that real gross domestic product declined 2.6 per cent in 2022 and is projected to contract 0.5 per cent this year.
"Decisive implementation of a comprehensive economic recovery plan could steadily reduce imbalances and provide a policy anchor that will help restore confidence and facilitate return to growth. However, the continuation of the status quo presents the largest risk to the outlook," the IMF said.
The fund warned that further delay of reforms will keep confidence low and cash dollarisation of the economy will increase, causing the national currency to depreciate further, keeping inflation high.
Stage results
1. Julian Alaphilippe (FRA) Deceuninck-QuickStep 4:39:05
2. Michael Matthews (AUS) Team BikeExchange 0:00:08
3. Primoz Roglic (SLV) Jumbo-Visma same time
4. Jack Haig (AUS) Bahrain Victorious s.t
5. Wilco Kelderman (NED) Bora-Hansgrohe s.t
6. Tadej Pogacar (SLV) UAE Team Emirates s.t
7. David Gaudu (FRA) Groupama-FDJ s.t
8. Sergio Higuita Garcia (COL) EF Education-Nippo s.t
9. Bauke Mollema (NED) Trek-Segafredo s.t
10. Geraint Thomas (GBR) Ineos Grenadiers s.t
Profile of Tarabut Gateway
Founder: Abdulla Almoayed
Based: UAE
Founded: 2017
Number of employees: 35
Sector: FinTech
Raised: $13 million
Backers: Berlin-based venture capital company Target Global, Kingsway, CE Ventures, Entrée Capital, Zamil Investment Group, Global Ventures, Almoayed Technologies and Mad’a Investment.
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Tearful appearance
Chancellor Rachel Reeves set markets on edge as she appeared visibly distraught in parliament on Wednesday.
Legislative setbacks for the government have blown a new hole in the budgetary calculations at a time when the deficit is stubbornly large and the economy is struggling to grow.
She appeared with Keir Starmer on Thursday and the pair embraced, but he had failed to give her his backing as she cried a day earlier.
A spokesman said her upset demeanour was due to a personal matter.
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England squad
Moeen Ali, James Anderson, Jofra Archer, Jonny Bairstow, Dominic Bess, James Bracey, Stuart Broad, Rory Burns, Jos Buttler, Zak Crawley, Sam Curran, Joe Denly, Ben Foakes, Lewis Gregory, Keaton Jennings, Dan Lawrence, Jack Leach, Saqib Mahmood, Craig Overton, Jamie Overton, Matthew Parkinson, Ollie Pope, Ollie Robinson, Joe Root, Dom Sibley, Ben Stokes, Olly Stone, Amar Virdi, Chris Woakes, Mark Wood
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SPECS
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Our legal columnist
Name: Yousef Al Bahar
Advocate at Al Bahar & Associate Advocates and Legal Consultants, established in 1994
Education: Mr Al Bahar was born in 1979 and graduated in 2008 from the Judicial Institute. He took after his father, who was one of the first Emirati lawyers
UAE currency: the story behind the money in your pockets
Lexus LX700h specs
Engine: 3.4-litre twin-turbo V6 plus supplementary electric motor
Power: 464hp at 5,200rpm
Torque: 790Nm from 2,000-3,600rpm
Transmission: 10-speed auto
Fuel consumption: 11.7L/100km
On sale: Now
Price: From Dh590,000
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
Killing of Qassem Suleimani
KEY DEVELOPMENTS IN MARITIME DISPUTE
2000: Israel withdraws from Lebanon after nearly 30 years without an officially demarcated border. The UN establishes the Blue Line to act as the frontier.
2007: Lebanon and Cyprus define their respective exclusive economic zones to facilitate oil and gas exploration. Israel uses this to define its EEZ with Cyprus
2011: Lebanon disputes Israeli-proposed line and submits documents to UN showing different EEZ. Cyprus offers to mediate without much progress.
2018: Lebanon signs first offshore oil and gas licencing deal with consortium of France’s Total, Italy’s Eni and Russia’s Novatek.
2018-2019: US seeks to mediate between Israel and Lebanon to prevent clashes over oil and gas resources.
MATCH INFO
Juventus 1 (Dybala 45')
Lazio 3 (Alberto 16', Lulic 73', Cataldi 90 4')
Red card: Rodrigo Bentancur (Juventus)
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What can victims do?
Always use only regulated platforms
Stop all transactions and communication on suspicion
Save all evidence (screenshots, chat logs, transaction IDs)
Report to local authorities
Warn others to prevent further harm
Courtesy: Crystal Intelligence
Frankenstein in Baghdad
Ahmed Saadawi
Penguin Press
Our family matters legal consultant
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
How to watch Ireland v Pakistan in UAE
When: The one-off Test starts on Friday, May 11
What time: Each day’s play is scheduled to start at 2pm UAE time.
TV: The match will be broadcast on OSN Sports Cricket HD. Subscribers to the channel can also stream the action live on OSN Play.
Quick%20facts
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T20 World Cup Qualifier fixtures
Tuesday, October 29
Qualifier one, 2.10pm – Netherlands v UAE
Qualifier two, 7.30pm – Namibia v Oman
Wednesday, October 30
Qualifier three, 2.10pm – Scotland v loser of qualifier one
Qualifier four, 7.30pm – Hong Kong v loser of qualifier two
Thursday, October 31
Fifth-place playoff, 2.10pm – winner of qualifier three v winner of qualifier four
Friday, November 1
Semi-final one, 2.10pm – Ireland v winner of qualifier one
Semi-final two, 7.30pm – PNG v winner of qualifier two
Saturday, November 2
Third-place playoff, 2.10pm
Final, 7.30pm
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MATCH INFO
Uefa Champions League, Group C
Liverpool v Red Star Belgrade
Anfield, Liverpool
Wednesday, 11pm (UAE)
