Lebanon plans stimulus as Salameh sees risk of growth

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.