I Economic recovery needs strong reforms
I Currency collapse led to high inflation
I Rampant poverty despite subsidies
Some international organizations see a ray of hope amid the multiplication of severe and unprecedented crises that the country is witnessing. The United Nations (UN) expects GDP to grow again by 14 percent this year, according to its ‘World Economic Situation Prospects 2021’ report. In its ‘Survey of Economic and Social Developments in the Arab Region 2019-2020’, the Economic and Social Commission for Western Asia (ESCWA) projects the growth rate at 1.5-1.8 percent. It said: “The modest recovery expected in 2021 is conditioned on successful structural reforms, restoring the trust of society and foreign stakeholders in Lebanese institutions, the success of measures to halt the deteriorating local currency and the outcomes of negotiations with the International Monetary Fund (IMF) to obtain financial support.” Meanwhile, the country continues to reel from escalating poverty, rampant inflation, a brain drain, depletion of foreign reserves, and further deterioration of the currency amid a perilous political deadlock. According to the Economist Intelligence Unit (EIU), the economy is expected to continue to shrink by a further 4.6 percent in 2021. It said that the multiple crises will be exacerbated by political stagnation, economic disruption caused by the Covid-19 pandemic, and the huge damage resulting from the Port Explosion. Households will continue to reduce purchases due to the sharp decline in their incomes while businesses will keep on postponing investment. Government and private consumption will weaken further driven by fiscal consolidation especially of subsidies, according to the EIU. A larger contraction (ten percent) is predicted by UK-based consultancy firm Capital Economics for 2021. It said the economic downturn is unlikely to improve this year as the country continues to reel under a severe economic, political, and humanitarian crisis. Economic conditions will remain dismal over the coming months due to many negative factors such as stalled talks with the IMF and
