Beirut blast to dou­ble sever­ity of Le­banon’s re­ces­sion

The Daily Telegraph - Business - - Business - By Tom Rees

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

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