The banking association: No need to worry because of diminishing foreign remittances

For the first time in more than 10 years, the inflow of foreign remittances to Lebanon witnessed a large decline during last year. Thus total foreign remittances recorded a drop to USD14.5 billion in 2014 from USD16.1 billion in 2013, which amounts to a decline of USD1.6 billion representing 9.9%. In an interview with Al Diyar newspaper, the President of the Association of Banks ABL, Francois Bassil, said that the decline was not huge given the historical performance of remittances which are difficult to forecast depending on the situation in source countries, as well as the prevailing conditions in Lebanon. Bassil disclosed that Lebanese expatriates normally are pumping about USD 7 billion a year which is equivalent to 17% of the GDP, thus making Lebanon the largest recipient of remittances in the Middle East and North Africa. He pointed out that these inflows reflect positively on Lebanon’s economy for a number of reasons, notably since they contribute to an increase in the level of domestic consumption and expenditure and play an important role in maintaining the balance of public debt. They also cover a significant part of the deficit in the balance of trade. One of the reasons for the above decline, according to ABL President, is that that the majority of European countries are going through economic difficulties, and that Euro zone economy is in recession, thus pushing doe the price of the Euro currency. This in turn, he added, negatively affected the Lebanese expatriates’ remittance inflows. He revealed that the political and security turmoil in the country and region prompted families to migrate which stopped the inflow of remittances which otherwise would have been destined to them. Nevertheless, he appealed to Lebanese not to be too much concerned about the fall in remittances, while pointing out that a more serious area of concern is the precarious security and political situation presently prevailing in Lebanon. (Al Diyar, February 17 2015)