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Lebanon This Week 579

April 06, 2019
Lebanon This Week 579

Non-Resident Capital Inflows to Lebanon (% of GDP)

 

Source: Institute of International Finance, Byblos Research

 

  • Non-resident capital inflows projected to increase by 20% to $8.4bn in 2019 with start of reforms
    The Institute of International Finance projected non-resident capital inflows to Lebanon at $8.4bn in 2019, which would constitute an increase of 20.4% from $7bn in 2018, compared to a peak of $15.6bn in 2009. Non-resident capital inflows to Lebanon would be the seventh highest among 15 countries in the Middle East & North Africa (MENA) region. 

    The IIF indicated that Lebanon's projected non-resident capital inflows for 2019 include $4.6bn in other investment inflows, mainly banking-related flows, $2.6bn in foreign direct investment (FDI), and $1.2bn in portfolio inflows. It anticipated FDI inflows to decline by 10% (-$286.5m) in 2019 from $2.9bn in 2018, and portfolio inflows to decrease by 23.6% (-$386.9m) from $1.6bn last year, while it expected other investment flows to grow by 84% (+2.1bn) in 2019 from an estimated $2.5bn in 2018. Non-resident capital inflows to Lebanon would account for 4.2% of total non-resident capital flows to MENA economies in 2019 and for 21.4% of total non-resident capital flows to the MENA region's oil importers. They would be equivalent to 14% of Lebanon's GDP in 2019 compared to 12.5% of GDP in 2018, and would represent the second highest level among the 15 MENA countries, behind Qatar (19.5% of GDP).

    The IIF considered that the gradual increase in capital inflows this year is contingent on the government's implementation of structural reforms and on significant fiscal consolidation. It expected most of the inflows to be mainly multilateral and bilateral loans from official sources. It also anticipated non-resident deposits at Lebanese banks to grow gradually due to high interest rates.
     

  • Lebanese citizens are 91st happiest people in the world, 11th happiest in MENA region
    The United Nations' 2019 survey about the level of happiness in 156 countries ranked Lebanon as the 91st happiest country globally and the 11th happiest nation among 20 countries in the Middle East & North Africa (MENA) region. Also, Lebanon came in 27th place among 39 upper middle-income countries (UMICs) included in the survey.

    The UN's measure of happiness is based on annual polls that were conducted by opinion polling and consulting firm Gallup between 2016 and 2018, with the results converted into a numerical score for each country. The survey asked respondents to evaluate their lives by placing their current living conditions on a "ladder" scale ranging from zero to 10 and to assign a score accordingly, where zero reflects the worst possible life and 10 points the best possible life. The poll typically interviews 1,000 respondents per year in each country. 

    The survey indicated that social support, or having someone to count on when in distress, explains about 23.6% of Lebanese citizens' overall happiness, the 56th highest share globally. GDP per capita follows with 19% (60th highest share), then expectations of a healthy life with 15.7% (29th highest share globally), freedom to make life choices with 4.2% (20th lowest share), generosity or donating money to charity with 3.2% (87th highest share), and perceptions of corruption with 0.5% (18th lowest share). The survey found that the citizens of Finland are the happiest worldwide, while those of South Sudan are the least happy globally.

    In parallel, Lebanon came in 82nd place among 133 countries in the world on data covering the 2005-2008 period. Lebanon's rank improves by one spot when using countries that have data for both the 2005-2008 and the 2016-2018 periods. Lebanon was one of 78 nations globally and one of six countries in the MENA region to post an increase in the level of happiness between the 2005-2008 survey and the 2016-2018 survey.
     

  • Lebanon ranks 74th globally, ninth in MENA region on Knowledge Index
    The 2018 Global Knowledge Index (GKI) ranked Lebanon in 74th place among 134 countries around the world and in ninth place among 18 countries in the Middle East & North Africa (MENA) region. Lebanon also came in 19th place among 34 upper middle-income countries (UMICs) included in the survey. Based on the same set of countries included in the 2017 and 2018 surveys, Lebanon's global rank regressed by 10 spots year-on-year, while its regional rank declined by two notches from the 2017 survey.

    The GKI is a joint initiative between the United Nations Development Program and the Mohammed Bin Rashid Al Maktoum Knowledge Foundation. The index measures the multidimensional concept of knowledge, and aims to introduce a comprehensive approach to "knowledge-based development". It is composed of seven sub-indices that are Pre-University Education (15%); Technical Vocational Education & Training (15%); Higher Education (15%); Research, Development & Innovation (15%); Information & Communications Technology (15%); the Economy (15%); and the General Enabling Environment (10%). The index aims to guide policymakers and the private sector in fostering a development process that seeks to equip individuals with the necessary skills for the labor market of the future.

    Globally, the knowledge level in Lebanon is better than the level of Botswana, Jordan and South Africa, while it is lower than the level of knowledge of Mongolia, Turkey and Colombia. Lebanon received a score of 45.2 points in 2018 compared to 46 points in the 2017 survey. Lebanon's score was lower than the global average score of 47.6 points and the UMICs' average score of 45.4 points, but it was higher than the MENA region's average score of 44.3 points.
     

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