BEIRUT: Consumer confidence in Lebanon witnessed a significant decline in the first quarter of 2018, regressing by 6.4% compared to 2017, according to Byblos Bank/American University of Beirut consumer confidence index (CCI).
The index released in collaboration between Byblos Bank and AUB revealed that consumer confidence decreased by 0.3% in January before dropping by 6.4% in March, averaging 60.4% in the first quarter of 2018 compared to 61.8% in the preceding quarter.
Chief economist at Byblos Bank Nassib Ghobril said that drop was driven by the tax increase implemented in October 2017 to fund a public sector wage hike.
“The main factor that affected household sentiment in the first quarter of the year was the implementation of the tax increases on consumption, income and profits, in addition to the hike in fees on a large number of administrative transactions that the parliament enacted last October,” he said.
The drop in consumer confidence was also exasperated as a result of economic inflation, pressures and stagnation and higher cost of living, as well as “a lack of tangible improvement in consumer’s quality of life.”
All these factors combined decelerated in each of the first three months of the year, with the March outcome representing a retreat of 18% from the recent peak that the index reached in June 2017.
The study also notes that Lebanese households remain very sceptical about Lebanon’s political establishment implementing the necessary reforms, with Ghobril noting that “this factor reflects the prevailing crisis of confidence between citizens and the political class in general.”
In order for consumer confidence to rise up again, Ghobril argues that “consumers need to see concrete evidence and tangible solutions that improve their economic well-being.”
The Byblos Bank/AUB Consumer Confidence Index is a measure of the sentiment and expectations of Lebanese consumers toward the economy and their own financial situation.
The Index is compiled, implemented and analyzed in line with international best practices and according to criteria from leading consumer confidence indices worldwide.