Lebanon’s Import Bill: Jewelry Before Baby Formula

Key Findings:

• Lebanon’s import bill totalled 19.5 billion US dollars (USD) in 2022, returning to pre-crisis levels. Although the overall quantity of imports decreased, rising world commodity prices and logistics costs led to an increase in import value.

• Lebanon’s import-to-GDP ratio rose to 90.7% in 2022, indicating a growing import-dependency trend.

• Imports of luxury items like cars and jewelry surpassed essential goods like medicines and infant formula in 2022.

• Despite weaker private consumption and limited foreign currency reserves, imports of cars and vehicles significantly increased in 2022.

• Medicine imports significantly declined in 2022, with pharmaceuticals dropping by half. This decrease is attributed to the collapsing healthcare system and bureaucratic complications with subsidy programs.

• Importers are part of the “war of attrition” over USD banknotes in the market as intense competition for USD banknotes not only places immense pressure on importers but also affects the overall stability of the Lebanese economy.

• Food imports increased by 22% in 2022 but remained below pre-crisis levels, reflecting changing consumption patterns and a shift towards cheaper goods.

• Lebanon’s cash-based economy, estimated at 45.7% of GDP by the World Bank, is placing pressure on the LBP and is complicating importer payments to suppliers. Trading outside the banking system is now common because commercial banks are not fulfilling their role as financial intermediaries.

By Crisis Analytics Team, Mercy Corps Lebanon