Lebanese households purchasing power decreasing

The Lebanese markets which were dynamic amidst the positive political developments during the fourth quarter of the past year have slowed down during the period of consultation for the formation of the new cabinet, according to Beirut Traders Association Fransabank Retail Index 4th Quarter 2016. The index showed that the lethargy prevailed even after the announcement of the government, posting 54.78 in the last quarter of 2016 against 53.41 in the third quarter. And despite the concordance of above stimulating events with the end-of-year and Christmas holiday season, the markets have not sufficiently recuperated. The impasse in local consumption across the various retail trade sectors has become structural, the index reported, noting that the psychological factor has stopped to be the only or key stimulus, no matter how vital it is. There were fundamental considerations related to the purchasing power and the priorities of spending, as well as to the profiles of consumers, (Lebanese citizens, refugees and tourists), according to the index analysis. The purchasing power of Lebanese households has drastically slid as a result of the dire economic conditions combined with an absence in growth and a ferocious competition in the labor market by skilled Syrian labor force who also have lower remuneration demands compared to the Lebanese, as well as a decline in the size of remittances from Lebanese expatriates to their families in Lebanon. The index found that the outcomes among retail sectors have been incongruent. While some sectors continued to witness a slowdown in activity, other sectors were able to achieve relative improvement. This proves, the index noticed, that the rationalization or prioritization in consumption is what matters most and that households spend mainly on basic needs and goods and dilly dally in non-essential items. As for the prime sectors that experienced a decline, they were as follows: car dealers (-13.51%), home accessories (-9.94%), clothing (constant fall reaching -8.91%), restaurants and snacks (-7.26%), malls (-7%), hypermarkets and food shops (-0.61%) and liquor and spirits (-0.27%). (Al Diyar, Al Hayat, February 23, 2017)