Contraction of the Private Sector Economy Slackened in February; BLOM PMI inched up to 47.3

 

Despite the persisting declines in the levels of output and new work, the contraction within the private sector companies soothed in February. The improving employment in the private sector companies and the slowing contractions of the levels of output and new orders mainly boosted the BLOM PMI’s performance however the Lebanese indicator remained below the neutral mark of 50, separating economic contraction from growth. On another front, foreign demand witnessed another slip in February as it continues to be negatively impacted by the economic slowdown in regional countries. However, new export orders saw slower deterioration for two consecutive months, which is most probably linked to the recovering international oil prices that positively impacted oil-exporting countries in the MENA region. Commenting on February’s PMI results, Dr Ali Bolbol, Chief Economist at BLOM Bank, revealed that: “For two months in a row in 2018, the Lebanese economy seems to be shrugging off its weakness and recording slower downturns in output and new orders: February’s headline PMI scored 47.3, the highest since April 2017. Though marginal, improvements in the sub-indices were almost across the board, showing a slight rise in employment, and slower increases in input costs and output prices. The limited momentum is encouraging, but it needs to stay steady and gain more in strength, especially in the face of weaker future expectations perhaps triggered by the political row between the Speaker of the House and the Minister of Foreign Affairs early in the month. The onus then is on politicians to give the economy the respite that it desperately deserves and the reforms that it badly needs.”

 

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