by Dana Halawi
BEIRUT, July 28 (Xinhua) -- Lebanese experts on Friday called for more measures to support the expansion of the country's private sector after a key index in June indicated its positive growth momentum.
Lebanon-based BLOMINVEST Bank announced in a report on July 5 that the Blom purchasing managers' index (PMI) rose from 49.4 in May to 50.2 in June, the highest level in 10 years.
A reading above 50 indicates expansion, while a reading below reflects contraction.
The bank attributed the growth to an increase in the number of new orders and employment, the expansion of business activities and slowing input cost inflation.
Adnan Rammal, representative of the trade sector in the Economic and Social Council of Lebanon, said a boom in the tourism industry has facilitated the index's return to the expansion territory.
"We saw an improvement in all sectors related to tourism, including hotels, restaurants, guesthouses, resorts, and car rental services, as we received a lot of expatriates and Arab tourists," Rammal said.
He explained that Lebanon's private sector has downsized businesses and cut employees' wages in the face of the economic crisis, which have enabled the sector to adapt to the challenges posed by the lingering crisis.
However, Patrick Mardini, president of the Lebanese Institute for Market Studies, said: "The Blom index means that the economic situation has improved, but it is still bad, yet not as bad as before."
Mardini said he expects not to lose more Gross Domestic Product (GDP) points. "We hit bottom on economic growth, but we will have some stability, yet we don't see any activity or reform that would make us recover," he noted.
Experts also emphasized the need to restructure the banking sector and enhance its performance as it is vital to improving the performance of other sectors of the national economy.
Smuggling is another problem that needs to be tackled, Rammal said, adding "it is unfair that some businesses need to pay taxes properly while others resort to smuggling to run from responsibilities and dues."
Lebanon has been facing an unprecedented financial crisis since October 2019, which has led to a sharp depreciation of the local currency.
The crisis was further exacerbated by the Beirut port explosions in 2020 and the protracted COVID-19 pandemic, which had led to business closures and employee layoffs. ■
