UN projects growth at 1.5 percent in 2014

New government should restore confidence

According to the World Bank’s second issue of the semi-annual Lebanon Economic Monitor, growth is projected to reach 1.5 percent in both 2013 and 2014.

The report said growth acceleration depends on the resolution of the conflict in Syria and an improvement in the local security and political environments. A rebound to four percent is projected in 2015.

Raya El Hassan, former Minister of Finance, said: “These projection are exaggerated, the slow economic activity is currently impacted by the delay of the government formation.”

According to the report, the impact of the crisis and the required stabilization costs are unsustainable given the country’s weak public finances. Several options could help reduce these urgent costs. They include facilitating external funding from the international community and introducing policy reforms to improve the efficiency of public service delivery.

The local banking sector has shown resilience to external shocks. Money supply rose 3.2 percent in the first seven month of 2013.

The occupancy rate in resorts and hotels witnessed a sharp decline. El Hassan said: “Once the government is formed, it has to take several measures to restore confidence among expatriates and tourists.”