Lebanon has 0 pct growth in 2019, but economy prospects to improve: Salameh


June 25, 2019


Lebanon has had zero percent growth so far in 2019 but the prospects for its economy are set to improve, Central Bank Gov. Riad Salameh said Tuesday.

“Despite the fact that we have this year zero percent growth till now, we think at the horizon the prospects will be better for the Lebanese economy,” he told a Euromoney conference in Beirut.

Salameh also said that the budget deficit in the first four months of 2019 did not exceed $1 billion, calling it a good indication. He added that the liquidity situation would improve in the next six months.

The budget deficit officially stood at 11.71 percent of GDP in 2018 compared to 9.28 in 2017, the Finance Ministry said, finally releasing the overdue results Monday.

The World Bank, the International Monetary Fund and international rating agencies have expressed deep concern over the alarming and unabated rise of the deficit, warning that Lebanon can no longer ignore the problem.

Parliament’s Finance and Budget Committee is currently reviewing the draft 2019 state budget after Cabinet approved the document following 20 sessions of negotiations.

Cabinet’s draft managed to lower the deficit to 7.59 percent of GDP, although that number is expected to change as the committee has endorsed a series of provisions to generate revenues while also striking down a number of the proposed austerity measures. Committee head MP Ibrahim Kanaan said Monday that the committee was trying to make up for every revenue-generating measure that it rejects during the budget discussions.

The international community pledged over $11 billion in grants and soft loans during the CEDRE conference in Paris last year. The unlocking of the funds is conditional upon Lebanon’s implementation of a series of key fiscal reforms.