The World Bank said that the Lebanese economy is suffering from Financial losses Three times the GDP for the year 2021.
In a report published on Wednesday, the bank stated that the country’s total financial losses amounted to $72 billion, calling for the need to restructure the local banking sector.
Lebanon is looking for solutions to get out of the tunnel of its financial, economic and monetary crises, including knocking on the door of the International Monetary Fund to obtain a financial loan, and the possibility of floating the local currency.
However, the World Bank believes that it is too late, regarding the hypothesis of floating the financial sector, “given the lack of sufficient public funds for this, especially since the state’s assets are only equal to a small part of these losses.”
He added, “Today, Lebanon is experiencing one of the most severe crises in the world. We expect the local economy to contract by 5.4 percent, assuming that the current scenarios remain unchanged until the end of the year.”
The Lebanese economy shrank by 7 percent last year, according to the bank’s reading, while it recorded a contraction of 21.4 percent in 2020.
He said, “The unprecedented political vacuum is likely to further delay reaching any agreement on resolving the crisis and approving the necessary reforms, which deepens the plight of the Lebanese people.”
Earlier today, the head of the Lebanese caretaker government, Najib Mikati, said that the current economic and monetary crisis will not reach a way out, without approving the final agreement with the International Monetary Fund.
And in late January 2022, the Lebanese government officially began negotiations with the International Monetary Fund on an economic recovery program in the country.
Lebanon is living in a political vacuum, and parliament has not yet been able to elect a president to succeed Michel Aoun, whose term ended on October 31.
