| 5 December 2021, Sunday |

Lebanon lacks future economic outlook

Prime Minister Najib Mikati held the second meeting of the “Committee to Address the Repercussions of the Financial Crisis” in the presence of the concerned ministers. They agreed to assign the Minister of Labor with regard to the Index Committee and to study the possibility of raising the minimum wage for workers in the private sector.

The Minister of Transport and Public Works presented a financial study for public transport that was submitted to the Ministry of Finance to determine the necessary costs as soon as possible.

The Minister of Finance also presented a detailed study on the measures that would respond to the emergency living crisis, specifically raising the daily transportation allowance, and approving a monthly advance as social assistance for workers in departments, public institutions, government hospitals and schools.

The Minister of Social Affairs explained that the required amendments to the ration card have been transferred to the Parliament Speaker, and a parliamentary session will be held on October 28th to approve the card and put it into effect.

Unlike other countries, the International Monetary Fund (IMF) has refrained from issuing its GDP growth forecasts for Lebanon for 2021 and 2022, but rather estimated the contraction rate in 2020 at 25 percent, which is the highest percentage among the economies of developed and emerging countries, and even among the Middle East and Central Asia countries.

In its latest report on the future outlook of the global economy, the IMF expected that the economies of most countries would recover and shift from contraction in 2020, to growth in the years 2021 and 2022, except for Lebanon, which was unable to estimate its growth figures for the period 2021-2026 due to the uncertainty about the economic situation in the country.

Experts considered that IMF’s failure to put estimates for Lebanon’s growth in the next stage, is an evidence of the uncertainty in the possibility of reaching an agreement in the near term on a rescue program with the IMF, which is the only salvation for Lebanon to get out of its crisis. The IMF did not receive until now the updated information and figures, neither from the Ministry of Finance nor from the Central Bank about its budget. Therefore, growth estimates differ significantly between the bailout implementation scenario and the non-conformance scenario.

Consequently, the IMF has currently refrained from estimating future economic indicators for Lebanon until the intentions are crystal clear. It is noteworthy, that it is likely that the government, for several reasons, will not be able to reach this agreement before the parliamentary elections scheduled for March 2022. Therefore, before this date, the implementation of any rescue program or the implementation of the required reforms will not take place.

The Central Administration for Statistics (CAS) announced that the Consumer Price Index (CPI) for September 2021 recorded an increase of 144.12 percent compared to September 2020. Inflation of consumer prices during the first nine months of the year amounted to 116 percent.

CAS indicated that the CPI for September 2021 recorded 8.16 percent increase compared to August.