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The year 2023 has been marked by numerous uncertainties and cautious optimism in Lebanon. The economic retrospective of the past year is largely shaped by the impacts of a series of economic and political upheavals. However, amidst the challenges, there have been positive developments. Let’s reflect on some significant events.
The Dollar Reaches LBP 140,000
On March 21, the exchange rate of the US dollar on the parallel market crossed the threshold of LBP 140,000 per dollar.
Record Increase in the Consumer Price Index
In March 2023, Lebanon’s Consumer Price Index witnessed a notable increase of 33.27% compared to February 2023. This index surged by 263.84% compared to March 2022.
Significant Lebanese Exports to Europe
Lebanon’s exports to the European Union experienced a substantial boost in 2023, with the value of exported products reaching $600 million.
Thriving Summer Season
The summer tourist season flourished, yielding profits that exceeded $3.5 billion. In August alone, more than 700,000 people arrived at Beirut’s Rafic Hariri International Airport (RHIA), making an unprecedented record figure.
Increase in Beirut Port Revenues
In 2023, the monthly revenues of the Port of Beirut soared from $400,000 to over $10 million.
Block 9: No Marketable Gas Resources
In October, Block 9, once the centerpiece of Lebanon’s hopeful prospects, revealed its contents. Yet, the uncovered gas quantities failed to meet expectations and were deemed non-marketable. It’s essential to emphasize that this outcome does not indicate a lack of gas wealth within Lebanon’s Exclusive Economic Zone (EEZ).
Increase in the Customs Dollar Rate
On May 12, the customs dollar rate was adjusted to align with the Sayrafa platform, at LBP 86,000. This adjustment followed an initial increase in early December 2022 when it rose from LBP 1,507.5 to LBP 15,000, then reaching LBP 45,000 on March 1, 2013, and LBP 60,000 on April 18. The subsequent adjustment aimed primarily at bolstering the revenues of the public treasury, facilitating salary increments, and supporting other social assistance initiatives within the public sector.
Sayrafa Aligned With the Parallel Market
The Central Bank of Lebanon (BDL) decided to increase the exchange rate of the dollar adopted on the Sayrafa platform from LBP 85,500 to LBP 89,500, starting from December 19. The dollar exchange rate was thus aligned with that of the parallel market.
LibanPost to Continue Managing the Postal Sector…
The contract with LibanPost, tacitly renewed since 2019, concluded on May 31. However, based on the decision of the Council of Ministers on November 16, the management of the postal sector will continue to be handled by LibanPost until further notice. The French shipping company CMA CGM had notably won the tender for managing the postal sector on July 13, initiated by the Ministry of Telecommunications through the Merit-Colis Privé group. Nevertheless, the tender results were rejected by the Court of Audit.
Sevenfold Surge in Internet Tariffs
On August 3, the Council of Ministers approved a sevenfold increase in the tariffs for telecommunication and internet services provided by Ogero, the state-owned provider.
Electricity Tariff Reduction
Electricity of Lebanon (EDL) slashed tariffs by 25%, leading to lower bills for January and February 2023. This adjustment was prompted by the drop in oil derivative prices and the dollar exchange rate against the Lebanese pound in the parallel market. While the bills initially included a 20% markup based on the Sayrafa platform rate, this markup was eliminated starting March.
Enhanced Trade Between Lebanon and Saudi Arabia
On May 18, during a meeting on the sidelines of the Arab League summit in Jeddah, the Lebanese and Saudi Ministers of Economy agreed to gradually increase their economic and trade exchanges. This move is expected to yield significant financial gains to Lebanon and inject foreign currency into the Lebanese economy.
World Bank Allocates $200 Million to Agrofood Sector
On June 29, the World Bank allocated a $200 million to support Lebanon’s agrofood sector and enhance the resilience of farmers and small and medium-sized enterprises (SMEs) amid the country’s multifaceted crises.
Change in Leadership at BDL
Wassim Mansouri, the first deputy governor of the Central Bank of Lebanon, assumed leadership of BDL on August 1, 2023, succeeding as acting governor to Riad Salameh. The seamless transition of power followed the procedures outlined in Article 25 of the Monetary and Credit Code, governing the succession process in case of a vacancy in the governor’s position.
Series of Decisions by BDL
• On November 17, Wassim Mansouri, the first vice-governor of the Central Bank of Lebanon (BDL), issued Circular No. 682, allowing account holders who closed or transferred accounts from one bank to another after October 31, 2019, to benefit from the provisions of Circular No. 158 dated June 8, 2021. This new circular has a retroactive effect from the day of opening the new sub-account.
• Similarly, Circular 158, which previously allowed beneficiaries to withdraw $400 in cash and the equivalent amount in Lebanese pounds at the rate of LBP 15,000 for a bank dollar, was amended to limit withdrawals to $400 in cash only.
• On April 19, BDL issued Circular 165 introducing new measures to stimulate economic activity, revitalizing the banking sector, reduce cash transactions and, most importantly, facilitate monetary transactions. This circular came into effect on June 1.
Increase in BDL Reserves
Foreign currency reserves of the Central Bank of Lebanon (BDL) increased by $430 million since August 31, 2023, totaling $9.003 billion by mid-November 2023.
Rise in Value of Lebanon’s Gold Reserves
The value of Lebanon’s gold reserves has been steadily increasing for a year. They were evaluated at $18.4 billion at the end of October, showing a 21.7% year-on-year increase.
Approval of Retirement Pension Project
In December, the Parliament approved the law establishing the retirement pension, replacing the end-of-service indemnity scheme.
GAFI: Lebanon Avoids the Gray List
On June 23, Lebanon was granted an extension to implement financial, monetary and banking measures to prevent its placement on the Financial Action Task Force’s (FATF) “gray list” as a non-cooperative country. In 2024, Lebanon is required to submit a progress report to the Middle East and North Africa Financial Action Task Force (MENAFATF) on its efforts in this regard.
Establishment of a Sovereign Fund
On December 14, the Parliament approved the establishment of a Sovereign Fund for the placement of revenues generated by gas and oil resources.
