News ID: 218211
Published: 0948 GMT July 13, 2018

Lebanon Central Bank head expects economy to grow 2% in 2018

Lebanon Central Bank head expects economy to grow 2% in 2018
SHUTTERSTOCK

Lebanon's Central Bank Governor Riad Salameh said he expects the economy to grow by two percent and for inflation to be four-five percent in 2018.

Speaking at an economic conference in Beirut, Salameh said the estimates were made in the light of a slowdown in the real estate sector and stable consumption, Reuters reported.

Lebanon has been suffering weak growth since 2011, hit by regional turmoil. The IMF has estimated growth rates of 1-1.5 percent in 2017 and 2018, saying traditional drivers of the economy — construction and real estate — remain subdued.

The IMF has also called for ‘an immediate and substantial’ fiscal adjustment to improve the sustainability of public debt, which stood at more than 150 percent of gross domestic product (GDP) at the end of 2017.

Salameh said he expects bank lending to decrease by 1.6 percent in 2018 compared to last year and, based on data from the first five months of this year, for bank deposits to grow by more than five percent in 2018.

Lebanon's economy relies on the confidence of millions of expatriate Lebanese who deposit money into local banks. The banks buy government debt, which finances the expanding budget deficit and debt.

Foreign deposit inflows into the banking system have slowed since 2011. The IMF said private sector deposits grew 3.8 percent last year — below the average for recent years.

   
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