BEIRUT: In the midst of the 2019 fiscal budget passing well into the year, and Prime Minister Saad Hariri’s cabinet fastened in deadlock, the unpredictability of the Lebanese economy is more pervasive than ever.
On Thursday, Byblos Bank issued the results of the Byblos Bank/AUB Consumer Confidence Index for the second quarter of 2019. Highlights from the report include the effect of tax hikes and household skepticism on consumer confidence. It also noted that concrete measures that raise citizens’ standard of living and economic well-being would drive household sentiment up.
Results of the study show that the Index regressed by 11 percent in April 2019 from the previous month, and increased by 2.8 percent in May and 3.2 percent in June 2019. The Index averaged 70.0 in the second quarter of 2019, accounting for a decrease of 6.1 percent from 75.5 in the first quarter of 2019 and a drop of 4.3 percent from 74.2 in the second quarter of 2018.
In addition, the Byblos Bank/AUB Present Situation Index displayed a mean of 61.9 in the second quarter of 2019 and a rollback of 6.9 percent from the previous quarter, while the Byblos Bank/AUB Expectations Index averaged 77 and receded by 5.6 percent from the first quarter of 2019.
The average monthly score of the Index in the second quarter of 2019 was 33 percent lower than the quarterly high score of 96.7 reached in 2009.
The second-quarter results show the consistently low expectations of Lebanese households, as 9.4 percent of Lebanese polled in the second quarter of 2019 expected their financial conditions to improve in the upcoming six months in comparison to 10.6 percent in the first quarter of the year. In correlation, 62.6 percent of respondents in the first quarter believed that their financial situation would decline relative to 60 percent in the previous quarter, while 26 percent forecasted their financial condition to remain stable in the next six months.
Furthermore, 8.9 percent of the Lebanese surveyed in the second quarter of 2019 expected business conditions in Lebanon to improve in the upcoming six months, less than the 9.4 percent in the previous quarter. Meanwhile, 68.8 percent of respondents anticipated business conditions to deteriorate in the covered period in comparison to 67 percent in the first quarter of 2019.
Overall, the results for the second quarter of 2019 show that female consumers consistently displayed a higher level of confidence than males, and consumers in the age bracket from 21 to 29 years demonstrated the highest confidence level relative to citizens in other age brackets during the said quarter.
Households with an income of USD 2,500 or higher per month consistently reported higher confidence levels than those earning less. Moreover, public sector employees were more optimistic than housewives, private sector employees, and the unemployed, while students reported the highest optimism levels overall.
Analyzed geographically, the confidence level of Bekaa region residents regressed by 11.5 percent in the second quarter of 2019 from the previous quarter. Households reported decreased confidence levels with the South reporting at -9.4 percent, the North reporting at -6.3 percent, and Mount Lebanon reporting at -4.1 percent. Notably, the sentiment of residents of Beirut was reported at an increase of 2.6 percent in the said quarter.
The sentiment of Bekaa residents was the highest among all regions during the second quarter of 2019, followed by households in the North, Mount Lebanon, the South, and Beirut. The confidence level of Druze households dropped by 14.7 percent in the aforementioned quarter, followed by the sentiment of Sunni households reporting at -5.8 percent, Christian households reporting at -5.2 percent, and Shiite households reporting at -4.5 percent.
In summary, Shiite households registered the highest level of confidence in the second quarter of 2019, followed by Druze, Christian, and Sunni households.
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