Beirut blast to double severity of Lebanon’s recession
THE blast that tore through Beirut last week is set to almost double the severity of Lebanon’s recession, according to the world’s top finance industry group.
The Institute of International Finance (IIF) warned output will plunge by 24pc in 2020, a much deeper contraction than the 15pc predicted before the explosion rocked the capital.
The Lebanese economy had already been crippled by hyperinflation, a collapsing currency and the pandemic before the $7bn (£5.4bn) of damage caused around the city’s port.
Last night, Lebanon’s government stepped down, less than a week after the blast killed more than 200 people and injured 6,000, sparking days of violent protests.
Hassan Diab, the prime minister, addressed the nation, announcing his resignation and that of his government, calling the explosion a “disaster beyond measure”.
Garbis Iradian, the IIF’s chief economist for the Middle East and North Africa, warned the disaster will deepen “its worst financial and economic crisis since its independence in 1943”.
Unemployment and poverty rates have reached “new heights” of 35pc and 50pc, respectively, and the outgoing government “failed to make progress on reforms needed to unlock international financing”, he said.
The destroyed port was used for 75pc of the country’s imports, meaning goods will depend on two much smaller ports, according to the IIF.
On Sunday, the International Monetary Fund’s chief Kristalina Georgieva promised to “redouble our efforts” as it laid out the reforms needed to revive its economy. Lebanon had asked for IMF help after defaulting on its debt this year but bailout talks stalled.
A demonstrator gestures during a protest following last week’s blast in Beirut. The Institute of International Finance has issued dire economic forecasts for recession-hit Lebanon