Byblos Bank and the Institute of International Finance (IIF) have published a joint report stating the Lebanese economy is suffering from protracted economic stagnation. It says a lack of reforms and delays in the formation of a new Cabinet have dampened private consumption and investments.
RELATED: Want a better deal on your personal loan? Click here to compare the best personal loans in Lebanon!
Their analysis concludes that political deadlock is delaying structural reforms that would lift growth and reduce unemployment. The delay in forming a new Cabinet, they state, is stopping access to USD 11 billion of concessional loans and grants pledged in April by the international community.
“Reaching consensus on effective government, combined with structural reforms, including fiscal reforms and addressing the chronic problems in the electricity sector, would spur growth,” said Dr. Garbis Iradian, Chief Economist for the Middle East & North Africa Department at the IIF.
“This would help move the Lebanese economy to a higher growth path beyond 2018 and help bring the public debt down to more sustainable levels.”
SEE ALSO: A rating agency has retained Lebanon’s stable economic outlook
Iradian noted, however, that Lebanon’s banking system remains resilient and enjoys high liquidity levels, supported by stable remittances from the Lebanese diaspora. The peg to the dollar also appears solid, the report added.
Real GDP growth of 1.3% is predicted this year, down from an earlier estimate of 1.7%.
Government debt is expected to increase to 150.7% of GDP this year, up from 147.7% last year.
