Source: Annahar
According to a recent UN report, the Lebanese economy shrank by 16.2% in 2021, compared to a contraction of 37.1% in 2020. According to the report on "prospects for the economic situation in the world in the year 2022" prepared by the Department of economic and social Department of the United Nations (UN/DESA), the United Nations conference on trade and Development (UNCTAD), as well as the five regional commissions distributed in Europe (ECE), Africa (ECA), Latin America and the Caribbean (ECLAC), Asia and the Pacific (ESCAP), western Asia (ESCWA), the Lebanon is facing an unprecedented crisis manifested during the current financial crisis and the loss of income for tourism due to the epidemic of Corona and blast the port of Beirut.
On the financial crisis, the report noted that the newly formed government will soon resume negotiations with the International Monetary Fund on debt restructuring and default. In this context, the report pointed out that although the debt in local currency is still being paid, in practice there has been a default on this debt due to excessive inflation rates. As for foreign currency debt, the report indicated that Lebanese banks and the BDL hold a large share (more than 50%) of this debt, $ 11 billion $ 5 billion from a total of 31.3 billion dollars. As a result, considering that the Eurobonds portfolio accounts for 94% of total foreign currency debt, it is imperative to deduct a large portion of deposits in foreign currency.
In the details provided by the Economic Research Unit of the Lebanese Credit Bank, the UN pointed out that two years after the onset of the corona epidemic, there does not seem to be an end to the epidemic in sight, so that 25% of the countries in development are still below the levels of GDP recorded before the epidemic, which can be attributed to the lack of adequate vaccines (23.9 vaccines per 100 people in less developed countries compared to 147.4 vaccines per 100 people in developed countries in 2021) and limited financial possibilities. The report predicts that the global economy will grow by 4.0% in 2022 and 3.5% in 2023, against a larger growth of 5.5% in 2021, the highest growth rate recorded in four decades. The report pointed out that high inflation in developed countries (the United States and the European Union) and large countries in development (Latin America and the Caribbean) poses a major threat to the global recovery, with inflation reaching 5.2% in the world in 2021, which is two percentage points higher than the average rate over the past decade.
At the regional level, the UN revealed that economic growth in the West Asian region reached 4.7% in 2021 compared to a contraction of 3.4% in 2020, and predicted that this growth will reach 4.8% in 2022 and 3.5% in 2023. The report also predicts that the GDP growth rate of oil exporters in West Asia will improve from about 2.5% in 2021 to 5.6% in 2022 and 3.8% in 2023, coinciding with a slight improvement in global energy demand.