Le­banon plans stim­u­lus as Salameh sees risk of growth

The Pak Banker - - BUSINESS -

Le­banon's cen­tral bank is plan­ning a stim­u­lus pack­age of at least $1 bil­lion (Dh3.67 bil­lion) next year to re­vive an econ­omy rat­tled by po­lit­i­cal un­rest and the civil war in neigh­bour­ing Syria, Gover­nor Riad Salameh said.

Eco­nomic growth in the most in­debted Arab coun­try will likely range be­tween zero and 1 per cent this year, the slow­est pace since at least 2011, Salameh told Bloomberg on Mon­day. The planned stim­u­lus, which he said could rise to as much as $1.5 bil­lion, brings the to­tal of the cen­tral bank's as­sis­tance pro­grams to about $5 bil­lion since 2013.

Be­set by sec­tar­ian crises and re­gional proxy con­flicts, Le­banon has been with­out a head of state since Pres­i­dent Michel Suleiman's term ex­pired in May 2014 be­cause law­mak­ers can't agree on a suc­ces­sor. Par­lia­ment hasn't con­vened in months, and week­end protests over the gov­ern­ment's in­abil­ity to deal with a grow­ing garbage dis­posal prob­lem rocked cen­tral Beirut.

Ad­di­tion­ally, more than one mil­lion refugees have flooded the na­tion of 4.5 mil­lion to es­cape the Syr­ian con­flict, which has blocked Le­banon's only over­land trade route and kept Gulf Arab tourists away. "The vac­uum in the pres­i­dency and the dif­fi­culty of other con­sti­tu­tional in­sti­tu­tions to op­er­ate is de­lay­ing a lot of" eco­nomic de­ci­sions, Salameh, at the helm of Banque du Liban since 1993, said by phone from Beirut. The cen­tral bank "has to in­ter­vene" to bol­ster the econ­omy and en­cour­age credit growth, he said.

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