IMF forecasts 2% growth for Lebanon this year

The International Monetary Fund anticipated in its ‘fourth article mission’ report on Lebanon a growth by 2% for the economy this year. IMF Executive Council said the ongoing war in neighboring Syria has dominated the economic outlook in Lebanon especially with the growing number of Syrian refugees presently which currently account for ¼ of the Lebanese population. The refugee crisis, it added, has drained the local communities adding to the poverty and unemployment and is troubling the already fragile economy, public finance and the infrastructure. The IMF report went on to say that the conventional sectors responsible for Lebanon’s growth, like tourism, real estate and construction have received a severe blow with imminent recovery or growth by 4% unlikely before 2019. It also noted a drastic decline in inflation during 2014 due to the decline in oil prices among other factors, but expected it to rise again to 3% by the end of this year. Concerning public finance, IMF noted unusual influences that allowed the accumulation of an initial surplus in 2014 (amounting to 2.5% of GDP) which however came unaccompanied by practical and decisive steps. Accordingly, the report expects that initial surplus in the balance of payments will turn around into a deficit of 1.25% of GDP by the end of 2015 while public debt continue to grow reaching nearly 132% of GDP. (Al Hayat, 2 July 2015)