Consumer confidence rose modestly in the second quarter of 2015 but remained well below 2012 levels, the Byblos Bank/AUB Consumer Confidence Index released Wednesday shows.
The index — which measures how optimistic or pessimistic consumers are about the state of Lebanon’s economy — declined marginally in January and February. It grew in March, regressed in April, and slightly improved in May and June 2015.
The index averaged 37.7 in the first quarter — nearly unchanged from the last measure at the end of 2014 — and increased by only 4.3 percent to an average of 39.3 in the second quarter of 2015.
“The results of the Byblos Bank/AUB Consumer Confidence Index for the first and second quarters of 2015 remained consistent with the ongoing trend of low household confidence since the first quarter of 2012,” said a statement issued by Byblos Bank.
“Indeed, the results of the first quarter of 2015 were the 13th lowest since the Index’s inception in July 2007, while the second quarter posted the 14th lowest quarterly reading in 32 quarters. Further, the first-half results constituted the Index’s seventh-lowest level on a semi-annual basis,” it added.
Nassib Ghobril, chief economist and head of Group Economic Research at Byblos Bank, said that political and security issues were partly to blame, with these issues continuing to have a negative effect on consumer sentiment.
“Fears that clashes in January between Hezbollah and Israeli forces on the southern border would escalate into a wider military confrontation, security breaches in Tripoli, and the standstill regarding the issue of the soldiers held by terrorist groups, negatively affected the confidence of Lebanese consumers during the first quarter of the year,” he said.
“The repeated failure of the Lebanese Parliament to elect a president and the resulting uncertain political outlook, along with widespread job insecurity due to the economic stagnation, held back the confidence of Lebanese consumers during the first and second quarters of 2015,” he added.
However, the 30 percent drop in local gasoline retail prices, the sharp reduction in telecom tariffs and Health Ministry’s food safety campaign, had a positive impact on households’ budgets and helped improve the outlook of consumers, Ghobril noted.
The Byblos Bank/AUB Consumer Price Index is made up of two sub-indexes: the Expectation Index, addressing consumer outlook for the next six months, and the Present Situation Index.
For the first time since 2011, the Expectations Index has posted higher values than the Present Situation Index, indicating that people are more positive about the future than their present situation.
Ghobril cautioned that the movement was very slight and the figure does not reflect a reversal of trend or a shift in household attitudes.
Only 9.7 percent of Lebanese polled in the second quarter of the year expected their financial condition to improve in the coming six months, while 69.6 percent believe that it will deteriorate and 18.9 percent believe their financial situation will remain the same.
