Balance of payments deficit
up 63 percent at $3.2 billion

Deterioration caused

by resurgence of imports

According to an article in the recently published Winter 2023 edition of Lebanon Opportunities magazine, the deficit in the balance of payments (BoP) surged 63 percent to $3.2 billion in 2022 after plummeting 81 percent in the previous year.

This increase was mainly driven by the resumption of growth in imports which is widening again the trade deficit. Imports returned to their pre-crisis levels and jumped by 40 percent to $19.1 billion in 2022.

Changes in the BoP deficit in 2020 and 2021 closely mirror the variations in the annual decreases in total customer deposits in the banking system. This reflects capital flights and the depletion of the country’s foreign currency reserves.


Source: Central Bank

The BoP, which measures the difference between money flowing into the country and out of it, has been recording deficits since 2011 when unrest in Syria began. The BoP deficit hit an unprecedented peak of $10.6 billion in 2020 which was equivalent to more than a third of the foreign currency reserves at the time. The only year that witnessed a surplus was 2016, as a result of the Central Bank’s financial engineering operations.