BDL to announce stimulus package
Housing will capture most loans
Share on Facebook     Share on LinkedIn        
WatsApp
The Governor of the Central Bank (BDL), Riad Salameh, said that the $1 billion stimulus package he will launch next year is meant to boost local demand.

Just as in the two previous packages, this one would consist of subsidized loans for housing, renewable energy, and environmental projects.

“Although the cost of subsidized loans is higher for banks, since they are provided to the banks by the BDL at low interest rates unlike 2009, where banks were lending based on their reserve requirements at the BDL, banks have now more room to grow their loans portfolio,” said Fady Sader, Assistant General Manager at Crédit Libanais. “These stimulus packages are vital for banks since most of them cannot lend based on their reserve requirement at the BDL, especially that deposits are not growing at the same pace as in recent years,” he said.

According to Salameh, the BDL has provided, through stimulus packages, 10,000 subsidized loans for education and 100,000 for housing. The value of environmentally responsible project loans by banks has exceeded $100 million.

“Housing loans will capture the main bulk of loans in the 2015 stimulus package ,” said Sader. “Banks are expected to absorb all the liquidity to be pumped by the BDL into the market, because demand is high and bank reserve requirements are low,” he said.

“BDL’s incentive packages go beyond subsidized loans. They helped to stimulate economic growth by between 1.5 to 2 percent in 2012 and 2013,” said Joe Sarrouh, Advisor to the Chairman at Fransabank. “Growth may be between 2 to 2.5 percent in 2015, in the light of the $1 billion package and remaining liquidity from previous packages,” he said.

Salameh said: “In 2013, 50 percent of the growth of the Gross Domestic Product (GDP) was driven by BDL’s incentives. That’s why we renewed the package for next year.”

Salameh’s statements came at the fourth annual Corporate Social Responsibility (CSR) Lebanon Forum, a two day event held at Phoenicia Hotel, and sponsored by BDL, in collaboration with the European Union.
Reported by Leila Rahbani
Share on Facebook     Share on LinkedIn        
WatsApp
Date Posted: Dec 08, 2014