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Lebanon This Week 640

July 13, 2020

  • Cost of living in Beirut is 167th highest in the world, second highest among Arab cities
    The Mid-2020 Cost of Living Index, produced by crowd-sourced global database Numbeo, ranked the cost of living in Beirut as the 167th highest among 514 cities around the world and the second highest among 25 Arab cities. Also, the cost of living in Beirut was the highest among 101 cities in upper middle-income countries (UMICs) included in the survey. In comparison, Beirut came in 157th place in the mid-2019 survey among 377 cities worldwide. Beirut ranked in the 68th percentile worldwide in the Mid-2020 Index, which means that the cost of living in the city was higher than about 68% of cities in the survey, while the cost of living in Beirut was higher than about 58% of cities worldwide in the mid-2019 survey, which reflects a relative increase in the city's cost of living. The Cost of Living Index is an indicator of the prices of consumer goods, such as groceries, meals & drinks at restaurants, transportation and utilities. Numbeo benchmarks the Index against New York City. It also issues a Rent Index, which is an estimation of apartment rents in a city compared to New York City rents. Numbeo relies on residents' inputs and uses data from official sources to compute the indices. 

    According to the Cost of Living Index, consumer goods in Beirut are more expensive than in Turin in Italy, Houston in the United States, and Bonn in Germany; while they are less costly than in Las Vegas and Louisville in the Unites States, and in Edinburgh in Scotland. Beirut received a score of 68.5 points, which means that prices in Beirut are 31.5% lower than those in New York City.

    In parallel, the Rent Index ranked Beirut in 206th place globally, in seventh place among Arab cities, and in sixth place among cities in UMICs. Globally, renting an apartment in Beirut is more expensive than in Cardiff in the United Kingdom, Lille in France, and Tampere in Finland; while it is less expensive than in Exeter and Aberdeen in the United Kingdom, and Shenzhen in China. Further, Dubai, Doha, Abu Dhabi, Ajman, Kuwait City and Manama are the only Arab cities that have more expensive rents than Beirut; while Shanghai, Beijing, Moscow, Bangkok, and Shenzen are the only cities among UMICs with more expensive rents. Beirut received a score of 24.4 points on the index, which means that rent in Beirut is 75.6% less expensive than in New York City.

    Also, the Groceries Index, which is an estimate of grocery prices in a city compared to New York City, ranked Beirut in 204th place globally, in second place among Arab cities and in fourth place among cities in UMICs. Beirut received a score of 55 points, which means that groceries in Beirut are 45% less expensive than they are in New York City. Finally, the Restaurant Index, which compares the prices of meals and drinks at restaurants and pubs relative to New York City, ranked Beirut in 196th place globally, in third place among Arab cities and in first place among cities in UMICs. The Lebanese capital received a score of 60.73 points on the index, which means that prices at restaurants and pubs in Beirut are 39.3% less expensive than they are in New York City. 
                                                                                   
    On a country basis, the Index ranked the cost of living in Lebanon as the 34th highest among 135 countries worldwide, the second highest among 41 UMICs, and the third highest among 16 Arab countries behind Qatar and Libya. Lebanon came in 35th place globally on the Rent Index, in 40th place on the Groceries Index, and in 31st place on the Restaurant Index.  

  • Lebanon ranks 64th globally, fifth in Arab world in insurance premiums in 2019
    Swiss Re's annual survey of the global insurance market indicated that Lebanon ranked in 64th place among the largest 88 markets in terms of premiums generated in 2019, and came in fifth place among 12 Arab markets included in the survey. Lebanon ranked in 61st place globally and in fourth place among Arab countries in 2018. Lebanon generated $1.61bn in total premiums in 2019, constituting a decline of 4% in nominal terms and a drop of 6.7% in real terms from the preceding year. Total premiums generated in Lebanon last year accounted for 0.03% of global premiums, for 0.3% of premiums generated in emerging markets excluding China, and for 1.4% of premiums generated in the Middle East & Africa region.

    Globally, insurance premiums generated in Lebanon were higher than premiums generated in Croatia ($1.58bn), Panama ($1.57bn) and Uruguay ($1.55bn); while they were lower than premiums generated in Ecuador ($1.8bn), and Bulgaria and Nigeria ($1.64bn each). Also, aggregate premiums in the Lebanese insurance market were higher than those generated in Qatar ($1.38bn), Kuwait ($1.33bn), Algeria ($1.25bn), Oman ($1.12bn), Jordan ($865m), Tunisia ($830m), and Bahrain ($788m) among Arab countries.

    Lebanon generated $1.14bn in non-life premiums last year, ranking it in 65th place among the 88 markets and in sixth place among Arab countries. Non-life premiums produced in Lebanon regressed by 1.6% in nominal terms, while they declined by 4.4% in real terms in 2019. Globally, non-life premiums generated in Lebanon were higher than those produced in Algeria ($1.13bn), Croatia ($1.12bn), and Egypt ($1.03bn); and came lower than non-life premiums generated in Kuwait and Panama ($1.16bn each) and the Dominican Republic ($1.15bn). 

    Further, Lebanon generated $471m in life premiums in 2019, ranking it in 65th place globally and in fourth place in the Arab world. Life premiums generated in the Lebanese market declined by 9.2% in nominal terms, while they dropped by 11.8% in real terms last year. Globally, life premiums generated in Lebanon were higher than those produced in Croatia ($463m), Ecuador ($434m), and Cyprus ($431m); and lower than life premiums generated in Trinidad & Tobago ($640m), and Romania and Sri Lanka ($481m each). 

    In parallel, Swiss Re estimated Lebanon's insurance density, or premiums per capita, at $236 in 2019, which ranks the local market in 58th place globally and in sixth place in the Arab world. Lebanon had a similar insurance density as Bulgaria; while it had a higher insurance density than Oman ($225), Argentina ($208) and Colombia ($182), and a lower density than Saudi Arabia ($294), Costa Rica ($283) and Mexico ($239). The survey estimated Lebanon's non-life density at $167 and life density at $69 in 2019.

    Also, the survey estimated the insurance penetration rate in Lebanon, or premiums relative to the size of the economy, at 2.85% of GDP in 2019, ranking it in 44th place among the 88 covered markets and in third place in the Arab world. Lebanon had a higher insurance penetration rate than the Czech Republic (2.83% of GDP), Colombia (2.82% of GDP) and Uruguay (2.74% of GDP), and a lower rate than Morocco (3.89% of GDP), India (3.76% of GDP) and the UAE (3.13%). Lebanon posted penetration rates of 0.83% of GDP and 2.01% of GDP in the life and non-life categories, respectively, in 2019. 
     

  • Lebanon ranks 87th globally, 12th among Arab countries in transparency of real estate sector
    Jones Lang LaSalle's Global Real Estate Transparency Index for 2020 ranked Lebanon in 87th place among 99 countries and markets worldwide and in 12th place among 15 Arab countries and markets included in the survey. Lebanon also came in 22nd place among 26 upper middle-income economies (UMICs). Based on the same set of countries and markets included in the 2018 and 2020 surveys, Lebanon's global rank regressed from 80th place in 2018 to 86th place in 2020, while its regional rank retreated from 10th place to 12th place in the 2020 survey. 

    Globally, Lebanon's real estate market is more transparent than markets in Honduras, Mozambique and Uganda, and is less transparent than markets in Belarus, Angola and Tunisia. It also ranks ahead of only Guatemala, the Dominican Republic, Iraq and Libya among UMICs. Lebanon received a score of 4.38 points in the 2020 survey compared to 4.18 points in the 2018 study, 4.06 points in the 2016 survey, 3.9 points in the 2014 study and 3.75 points in the 2012 survey, reflecting a deterioration in the transparency level of the Lebanese real estate market. Also, Lebanon's score lagged the global average score of 3.2 points, the UMICs' average of 3.51 points and the Arab average of 3.9 points.

    Further, the Lebanese real estate market came in the "Opaque" category in the 2020 survey, along with 18 other countries in the world that include Algeria, Ethiopia, the Ivory Coast, Libya, Senegal and Tanzania. The survey downgraded the Lebanese real estate market from the "Semi-Transparent" category in 2012 to the "Low-Transparency" category in 2014 and to the "Opaque" category in 2016.
     

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