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| Global organizations ask for urgent reforms
| World Bank slams the ‘Great Denial’
| High food prices mainly affect the poor
The World Bank and the International Monetary Fund (IMF) continue to urge the government to speed up the reform process amid the escalating crises. The World Bank has accused the country’s elite of deliberately orchestrating the depression. The modest possible return to growth follows a very weak GDP base and so it is not significant.
GDP may return to growth in 2022
After four years of steady contraction, the economy is expected to start growing again this year with a forecasted growth rate of two percent to be followed by a growth of four percent in 2023, according to a Bloomberg survey which polled ten economists. According to the estimate of the World Bank’s ‘Lebanon Economic Monitor’ (LEM) for the fall of 2021, real GDP is likely to have declined by 10.5 percent in 2021 on the back of a 21.4 contraction in 2020. GDP shrank by 58.1 percent over 2019-2021, the highest contraction in a list of 193 countries, according the World Bank’s LEM titled ‘The Great Denial’. “Lebanon’s deliberate depression is orchestrated by the country’s elite that has long captured the state and lived off its economic rents,” the World Bank said. According to the LEM report, the country’s postwar economic development model has become bankrupt. “The collapse is occurring in a highly unstable geopolitical environment making the urgency of addressing the dire crisis even more pressing,” the World Bank said. The United Nations (UN) said in its World Economic Situation Prospects 2022: “Lebanon faces an unprecedented economic and financial crisis, with GDP growth contracting by 7.2 percent in 2019 and 37.1 per cent in 2020. While Covid-19, the subsequent loss of tourism revenues and the devastating Beirut port explosion were major drivers of the downturn, an unravelling financial crisis is also a significant factor.”
Top GDP contraction among 193 countries
Many pressing challenges
“Deliberate denial during deliberate depression is creating long-lasting scars on the economy and society. Over two years into the financial crisis, Lebanon has yet to identify, least of all embark upon, a credible path toward economic and financial recovery,” said Saroj Kumar Jha, World Bank Mashreq Regional Director. The government has to urgently move forward with the adoption of a credible, comprehensive and equitable macrofinancial stabilization and recovery plan, according
