IMF highlights the problem of the electricity sector and that of oil exploration

The International Monetary Fund (IMF) warned Lebanon of the imminent dangers threatening its economy, social fabric, financial sustainability and public debt should conditions continue to deteriorate. In a report published, the IMF stated that the decline in oil prices has caused a temporary relief in Lebanon’s public finance, noting that while the interdependence between the State and the banking sector has normally been a source of strength, the economy however remains highly dependent on the continuous inflow of deposits and thus sensitive to any weakening in confidence. The report indicated that while the growth of deposits has retreated during the past few years, the level continues at a good average of between 7 and 8%, thus enabling the country to cover general as well as foreign funding needs while preserving the high rate of foreign currency reserve. The report also highlighted two priority areas: the first, is the passing of the 2015 general budget, and second is addressing the problem of the electricity sector. The IMF report anticipated that the privatization of the Beirut Stock Exchange might very well help in expanding financial markets by way of encouraging young companies to enter the shares market. Furthermore, the IMF report noted that structural reforms remain vital to enhance economic growth potentials in Lebanon, stressing the need to tackle various pressing legislative files in order to attract investments. These include the passing of the special oil tax law, various other legislations related to oil and gas exploration, the framework law related to partnership between private and public sectors. (Al Mustaqbal, 21 July 2015)