2.5 percent growth in 2016
forecasted by the World Bank
Higher consumption and expenditures on refugees
seen as main drivers
The economy is expected to grow by 2.5 percent in 2016. It is estimated that it grew by two percent last year, the World Bank (WB) said in a recent report.
This forecasted improvement may be attributed to higher consumption growth, thanks to declining oil and food prices and the large numbers of refugees and related public expenditures, according to the WB’s Global Economic Prospects report.
The country will benefit from export opportunities to Iran, after the lifting of the embargo. Iran’s economy will be witnessing growth and Lebanese banks are showing interest in operating there, the WB said.
Nicholas Nahas, former Minister of Economy and Trade, said that the Central Bank’s economic stimulus package contributes to this expected growth improvement as well as the resilience of entrepreneurs who have acquired immunity to political and security challenges. He said the growth rate could be improved further if the country unleashes the power of its private sector.
Kamal Hamdan, Managing Director of Consultation and Research Institute (CRI), said that the growth forecast is exaggerated and that the Central Bank has forecasted a flat performance for 2016. He said that consumption by Syrian refugees contributes 1.25 percentage points to economic growth.
The impact of security spillover from regional conflicts may become even worse, “through trade disruption, reduction in cross-border investment, evaporation of tourism, or an inability to manage pressure on public services,” according to the WB.
Reported by Shikrallah Nakhoul
Date Posted: Jan 14, 2016