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Lebanon Economic Monitor : The Deliberate Depression (English)

For almost a year, Lebanon’s macroeconomy has been assailed by compounded crises, beginning with an economic and financial crisis, followed by COVID-19 (coronavirus) and lastly the explosion at the Port of Beirut. By October 2019, the economy plunged into a financial crisis brought about by a sudden stop in capital inflows, which precipitated systemic failures across banking, debt and the exchange rate.1 This included, on March 7, 2020, a Government default on a $1.2 billion Eurobond redemption, marking the first ever sovereign default for Lebanon. Eleven days later, the Government declared a State of General Mobilization imposing a lockdown to counter COVID-19, including the closure of the borders (airport, sea and land), and public and private institutions. Lastly, on August 4, 2020, a massive explosion rocked the Port of Beirut (PoB), destroying much of the port and severely damaging the dense residential and commercial areas within 1- to 2-mile radius. Beyond the human tragedy, the economic impact of the explosion is notable at the national level despite its geographical concentration. Of the three crises, the economic crisis has by far had the largest (and the most persistent) negative impact. Real GDP growth is projected to sharply decelerate to –19.2 percent in 2020, on the back of a –6.7 percent contraction in 2019.

Details

  • Author

    Harake,Wissam, Jamali,Ibrahim, Abou Hamde,Naji

  • Document Date

    2020/11/01

  • Document Type

    Working Paper

  • Report Number

    154631

  • Volume No

    1

  • Total Volume(s)

    1

  • Country

    Lebanon,

  • Region

    Middle East and North Africa,

  • Disclosure Date

    2020/11/30

  • Disclosure Status

    Disclosed

  • Doc Name

    Lebanon Economic Monitor : The Deliberate Depression

  • Keywords

    Financial Sector; economic crisis; high frequency; financial crisis; real gdp; Public and Private Institution; current account balance; parallel exchange rate; reform package; Real estate; banking sector; Exchange Rates; black-market exchange rate; exchange rate depreciation; exchange market pressure; real estate collateral; high inflation rate; financial sector restructuring; european monetary union; monetary policy framework; average exchange rate; lack of alternative; asset and liability; private sector activity; banks' balance sheet; lower income countries; foreign exchange position; trade and investment; financial market participant; labor force participation; changes in policy; Exchange rate policies; Governance and Accountability; asian financial crisis; exchange rate adjustment; exchange rate pass; social sector reform; banking sector restructuring; exchange rate policy; banking sector regulation; multiple exchange rate; high skilled labor; global financial crisis; wealth tax; tourist arrival; fiscal balance; capital inflow; Capital Inflows; fiscal adjustment; public debt; real asset; gold reserve; low frequency; tourism sector; construction permit; construction activities; small depositor; macroeconomic fundamentals; gross debt; fiscal position; currency devaluation; macroeconomic stabilization; market rate; financial system; governance reform; debt holding; in poverty; external position; social cost; sovereign default; fiscal development; recovery program; capital control; systemic failure; banking system; geopolitical tension; foreign financing; regressive tax; dollar deposit; macroeconomic indicator; balance account; treasury bond; coupon payment; foreign debt; international remittance; optimal policy; bank shareholders; economic efficiency; financial failure; corporate finance; basic consumption; private loan; government default; asian crisis; confidence index; fiscal policy; distribution list; Social Protection; Fiscal policies; government consumption; private consumption; income source; legal jurisdiction; human welfare; empirical evidence; monthly observation; human capital; debt restructuring; exchange system; Brain Drain; supply chain; central bankers; economic slowdown; debt sustainability; linear relationship

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Citation

Harake,Wissam Jamali,Ibrahim Abou Hamde,Naji

Lebanon Economic Monitor : The Deliberate Depression (English). Washington, D.C. : World Bank Group. http://documents.worldbank.org/curated/en/474551606779642981/Lebanon-Economic-Monitor-The-Deliberate-Depression