National Accounts of Lebanon Lebanese National Accounts Workshop on National Accounts Dec. 2006, Cairo Organized by Escwa

Historical Background 1964 The Lebanese national accounts was first established in the year 1964 by the central administration of statistics under the direction of Mr. Robert Kasparian. The model used was similar to the SNA 1993 model adopted by the international organization Work in statistical field was frozen till the year 1994 because of the war incidents in Lebanon. The last economic accounts published by the Central Administration of Statistics (CAS) date from The CAS publication, entitled “Statement of Economic Accounts”, highlighted the statistical gaps which made it difficult to draw up accurate economic accounts that cover all aspects of the economy.

The CAS has made great efforts to fill these gaps: –A census of housing units and establishments having an economic activity in –A sampling survey on household living conditions in June 1997, and a survey of household budgets in Beirut and its suburbs throughout the year –The Ministry of Agriculture carried out an agricultural census in 1997 with the assistance of the FAO. –The Ministry of Industry conducted an update for 1998 of the industrial census originally taken in 1994 with the assistance of the German technical cooperation agency (GTZ). –The National Employment Office carried out two employment surveys in 1996 and 1999 with the help of ILO.

2002 The procedure to produce national accounts was delayed because the central administration of statistics at that time had basic tasks to execute. In early 2002, the Lebanese Government assigned a special team in the Ministry of Economy and Trade the task of compiling the national accounts for year 1997 till 2002 with the technical assistance from the French National Institute of Statistics and Economic Studies. The year 1997 was chosen to be the base year because the data for the year 1997 are sufficiently complete to allow the compilation of the main accounts describing all aspects of the economic life of the country may be considered a “normal” year – in that economic activity returned to a normal volume after the period of major project launches to rebuild the infrastructure destroyed by the war, and had not yet felt the effects of the world recession that appeared in subsequent years – and thus can serve as a base year for the construction of economic accounts. This team completed its mission in July 2005.

2005 In December 2005, the H.E. prime minister extended the mission of the team to compile national accounts for the year 2003 till 2005 in the presidency of the council of ministers. Publications Year 1997 issued in year 2003 Years 1997 till 2002 issued in year 2005 Year 2003 issued in year 2006 The publication of year 2004 will be issued hopefully this month.

Current value LBP billion Goods and services use-resource table (All products) Note: Use-resource tables are established according to the territorial concept. Consequently imports and consumption do not include household expenses abroad. In the same way, tourists expenses on the territory are not included in exports but in consumption.

Goods and services input-output table Year 2003 current value LBP billion

Table of territorial corrections Note: Input-output tables are established according to the territorial concept. Consequently imports and consumption do not include household expenses abroad. In the same way, tourists expenses on the territory are not included in exports but in consumption. The changeover to data according to the national concept is given at the bottom of tables. Activities in these tables are homogeneous in the sense that each activity produces a definite group of products and each group of products is produced only by this activity.

Integrated economic accounts of the national economy The international system of economic accounts (SNA93) considers the establishment of a set of accounts for each of the five categories of agents of the national economy, noted by S.1 and for the rest of the world noted by S.2. The five categories of agents of the national economy are: - S.11: non-financial enterprises - S.12: financial institutions - S.13: public administrations - S.14: households - S.15: non-profit associations The level of development of Lebanese national statistics does not allow a correct establishment of the economic accounts of each of the five agents separately. It is in particular impossible to break down the operations of production and distribution between non-financial corporations and households. It is however possible to estimate the main elements of the integrated accounts of domestic agents as a whole and those of the rest of the world in an approximate way. The following tables present the integrated accounts of the whole national economy (S.1) and the rest of the world (S.2). These accounts show the main aggregates characterizing the economic activity during the period

Integrated accounts of the national economy (S.1)

The various operations carried out between the economic agents or flows arising from the economic activity are broken down into the six following categories or subcategories of accounts: (the numbers are the codes of the international classification of the accounts). - I. Production account - II.1. Generation and allocation of primary income account - II.2. Secondary distribution of income account - II.4. Use of income account - III.1. Capital account - III.2. Financial account Evolution of the main economic aggregates LBP (billion) Nature of the aggregate GDP Net factors’ income = GNI Net current transfers =GNDI Final consumption = Gross national saving Net capital transfers = Gross disposable saving GFCF =Net lending(+)/borrowing(-) Foreign financing =Balance of payments

- Gross domestic product (GDP) is the balancing item of the production account of all economic agents - Gross national income (GNI) is drawn from the allocation of primary income account - Gross national disposable income (GNDI) is the balancing item of the secondary distribution of income account - Gross national saving is the balancing item of the use of disposable income account - Gross disposable saving and net lending/borrowing are deduced from the capital account - The balancing item of the balance of payments appears in the financial account under the heading, “Changes of cash and deposits”

Rest of the world accounts and balance of payments Accounts of the rest of the world (S.2)

The operations carried out with the rest of the world are recorded in four accounts, which release the main aggregates of the balance of payments: - I. Goods and services transactions account, the balance being equal to the trade balance. - II. Primary income and current transfers account, the balance being equal to the current balance. - III.1 Capital transfers account, the balance being equal to foreign capacity or need for financing. - III.2 Financial account, the balance being equal to the balance of payments deficit or surplus

Evolution of the various balancing items of the balance of payments Note: A positive balance in the foreign account represents a deficit for the country, while a negative balance represents a surplus. Thus, the balance of payments was in deficit in 2000 and 2001, and in surplus in 2002 and Nature of balance Trade balance Net income and transfers = Current balance Net capital transfers = Net lending/borrowing Net financing = Balance of payments LBP (billion)

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