Possible recession in 2019
GDP to drop by 0.2 percent
World Bank expects growth to pick up in 2020
The World Bank (WB) said in an update that Lebanon’s real gross domestic product (GDP) is expected to contract by 0.2 percent in 2019.
“The economy has stagnated in 2018-19, with a bias in the latter towards a minor recession. While slow growth has been in effect since 2011, the past couple of years have specifically reflected decelerated growth that is linked to a policy of liquidity tightening meant to counter rising macro-financial risks,” the WB said in the ‘Lebanon's Economic Update October 2019’.
Growth is expected to pick up in 2020 and reach 0.3 percent. But this is less than the growth for 2020 predicted last April. The WB has revised its GDP forecasts down for 2019, 2020, and 2021. The growth predicted for 2019 last April was 0.9 percent.
High frequency indicators over the first six or seven months of 2019 show a broad-based slowdown, with tourism an exception. “Private consumption, driven by tourism, regains its traditional role of leading real GDP growth,” according to the report. Tourist arrivals rose eight percent in the first seven months of 2019 compared with the same period a year earlier.
“The real estate sector is a main drag on the economy as illustrated by a 32.4 percent year-on-year decline in cement deliveries in the first six months of 2019,” the WB said.
According to the report, “Lack of obvious sources for an economic boost suggests medium-term economic prospects remain sluggish at best. We assume a marginal increase in public investment reflecting minimum progress on infrastructural projects.”
Reported by Shikrallah Nakhoul
Date Posted: Oct 10, 2019