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Increasing public debt leading Lebanon to ‘bankruptcy’

November 7, 2018 at 1:24 pm

Lebanese Prime Minister Saad Hariri speaks at a press conference in Beirut, Lebanon on 22 November 2017 [Lebanese Presidency/Anadolu Agency]

Lebanon’s failure to implement reform plans aimed at stopping public sector waste, fighting corruption and reviving the falling economic indicators is driving the country to bankruptcy.

The second Vice-Governor of the Central Bank of Lebanon, Saad Atari, said yesterday that Lebanon has failed to adopt steps to reduce the huge budget deficit and public debt.

Speaking at a conference in the UAE capital Abu Dhabi, Atari said that financial discipline has not started in Lebanon, adding that the political stalemate has delayed the process.

READ: Lebanese chafe as economic blues begin to bite

Differences have hampered Prime Minister Saad Hariri’s efforts to form a government; leading to a void in power.

Atari added that Lebanon, with its limited resources, can not rely on agriculture or industry for growth, but needs a knowledge-based economy with investments in areas including information technology.

The Lebanese economy is growing by one to three per cent and supporting 1.5 million Syrian refugees. “This has caused labour market tensions where the Lebanese themselves are suffering from rising unemployment,” he added.

Lebanon’s public debt has increased in recent years to nearly 152 per cent of the country’s GDP. The country’s economic growth has also been weak where jobs are scarce, the infrastructure is poor, and the country’s foreign currency imports are dwindling.