BEIRUT — Lebanese economy has drastically weakened due to the deterioration of the main sector, tourism, according to a specialized report published by the local press Friday. Only a million tourists came to the country by last fall, said the report, a figure that indicated sharp fall of the number of re-creation seekers, as compared to previous years. Tourism businesses have dropped by 50 percent, due to deteriorating security conditions in Syria that impacted on conditions in Lebanon and prompted many regular visitors to abstain from coming. Tourism secures up to 37 percent of the gross domestic product. The sector also makes up to $15 billion per year, and employs about 40 percent of the domestic labor force. Tourism institutions have incurred losses amounting $7 billion this year. Many of the regular tourists to Lebanon come from Gulf countries, where authorities have warned against traveling to Lebanon, amid regional tensions, partly resulting from the Syrian crisis. However, excessive cash, steady growth in customer deposits and increasing provisions for non-performing loans will allow the Lebanese banks to override the negative effects of the economic slowdown, bankers said Friday. Local banks had shown mixed results in the third quarter with some seeing slightly higher profits while other experienced a drop in net income. “There is no cause for concern. Banks are still attracting deposits at rates that are higher than the GDP growth,” Joe Sarrouh, the adviser to the chairman of Fransabank, said. “The banks are expected to register a growth of nearly 7 percent this year compared to a one percent GDP growth.” – AgenciesSarrouh said some of the results by the Lebanese banks give a strong indication about the resilience of this sector: Overall, the sector's performance this year may either be flat or slightly higher than last year.” Lebanese banks have made heavy investments in war-torn Syria as in the case of BEMO, which saw its profits fall by 74 percent in the third quarter. BEMO attributed the sharp drop in profits to the heavy provisions it made for non-performing loans. “The seven or eight largest banks in the country which control more than 80 percent of the market share have made reasonable profits despite the economic slowdown and the Arab Spring,” Sarrouh argued. Other bankers echoed similar confidence in the banking sector. – Agencies
