Brexit expected to have limited economic impact on Lebanon

Whilst the world is still guessing what would be the implications of the Brexit vote on the economies of Europe and the Arab region, economic expert Jassem Ajaqa predicted in an article published  two days ago on “An Nashra” online news that this move will have limited repercussion on Lebanon.  Ajaqa noted that Lebanon’s trade relations with Britain amount to USD 575 million a year (according to the International Trade Centre – 2014) whereas Lebanese exports to Britain amount to USD 38 million per year.  As a result of Brexist, the GBP exchange rate vis-à-vis the US dropped by 10% in less that 7 hours.  This is likely to produce a windfall in trade for Lebanon of some 30 million USD or the equivalent of 6% of import value.  However, and according to Ajaqa, this scenario remains theoretical as it is based on the assumption that prices are not likely to change.  On the other hand, Ajaqa pointed out to the Lebanese dispora in Britain and which numbers some 18000 people (as per the International Migration Organisation) and who sends remittances to Lebanon for the amount of USD 153 million yearly (World Bank, 2015) or the equivalent of 2.14% of total remittances.  These remittances are likely to drop by 8% (i.e. by USD 12 million) due to the drop in the GBP exchange rate and the inflation which will ensue.  Ajaqa also predicted that the Brexit vote will result in increasing domestic unemployment thus leading the British government to exert more pressure on foreign nationals leading to letting go of tens of Lebanese employees. Finally, Ajaqa spoke about the financial institutions and banks that have assets in GBP and other currencies and which may be affected by the Brexit vote and may suffer considerable losses if they do not take the necessary precautions. (Al-Diyar, June 28,2016)