The deterioration of the country's economy. The political vacuum is leading the Lebanese economy to the abyss



Mazen Rahhal, the owner of a shop in a busy suburb of Beirut, commented on the Lebanese economy that he had rarely encountered such a failure: he sold clothing at a lower price than in the past, while another shop had a competitor . Goods at this time.

2018 has a combination of years of gradual slowdown with a number of more recent factors: rising interest rates, falling house prices and currency uncertainty in a time of uncertainty when politicians debate a new government.

For Lebanese companies and people, economic turmoil and the lack of strong control by the government – almost three months after the Lebanese vote in general elections – have become constant concerns.

With the reconstruction of Lebanon after the 15-year civil war ended in 1990, there was a period of economic growth.During its heyday in the 1950s and 1960s, Lebanon attracted Gulf Arab tourists willing to spend as they fled for the stifling summer heat of their countries.

But the problems were around the corner all the time.

In 2015, former Prime Minister Rafiq al-Hariri was murdered, which led to widespread division over the role of the powerful Hezbollah group by Iran and Syria in the country.

The Syrian war, which has been reflecting since 2011, aggravated these differences, while the bulk of Lebanon's land trade was reduced and the tourists were under pressure, most of them Sunni Muslims, who fear the growing influence of the armed Shiite movement of Hezbollah.

This followed a state of political stalemate: after the death of Hariri, the government approved a new public budget last year and no parliamentary elections have been held since the elections of 2009 to May this year.

Economic growth, which was between 8 and 10 percent before the Syrian war, averaged 1 percent to 2 percent since the war began, and Bloom's PMI has been declining every month since 2013.

The country's debt amounts to 150 percent of the gross domestic product, mostly to local banks, which are partly dependent on remittances from Lebanese expats, partly attracted by attractive interest rates.

Khoury Home is a large company in Lebanon. Her stores, which are popular throughout the country, sell household appliances.

Roman Matthew says he tells his staff every year since he became chairman in 2013, which next year will be more difficult than before.

"We have reached 2018, the disaster of 2018, I think after what hardened in 2018, that is still hard for us."

In a move that could increase the difficulties that Matthew brings with it, last year the government reduced a number of incentives for banks on home loans, which contributed to the slump in the housing market. While fewer people buy homes, fewer people want new fridges or televisions.

But suffering does not include all companies. Michael Wright, chief executive of the Spinneys chain of supermarkets, said it had increased sales volumes because many of his goods had been imported from Europe and exchange rates had pushed prices.

"We are selling more, our sizes are going up, but this is being compensated by a fall in prices."

Since the May elections, there has been a keen debate between rival political parties about the formation of a new national unity government, with enough important parties to ensure political support from across the country.

In the absence of a new government, Lebanon can not implement the financial reforms needed to keep its debt under control or billions of dollars in foreign investments pledged in infrastructure to revitalize the economy.

In the meantime, interest rates have risen because the government is increasingly trying to attract higher bank deposits on which government debt is dependent, and high interest rates also hurt.


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The deterioration of the country's economy. The political vacuum is leading the Lebanese economy to the abyss



Mazen Rahhal, the owner of a shop in a busy suburb of Beirut, commented on the Lebanese economy that he had rarely encountered such a failure: he sold clothing at a lower price than in the past, while another shop had a competitor . Goods at this time.

2018 has a combination of years of gradual slowdown with a number of more recent factors: rising interest rates, falling house prices and currency uncertainty in a time of uncertainty when politicians debate a new government.

For Lebanese companies and people, economic turmoil and the lack of strong control by the government – almost three months after the Lebanese vote in general elections – have become constant concerns.

With the reconstruction of Lebanon after the 15-year civil war ended in 1990, there was a period of economic growth.During its heyday in the 1950s and 1960s, Lebanon attracted Gulf Arab tourists willing to spend as they fled for the stifling summer heat of their countries.

But the problems were around the corner all the time.

In 2015, former Prime Minister Rafiq al-Hariri was murdered, which led to widespread division over the role of the powerful Hezbollah group by Iran and Syria in the country.

The Syrian war, which has been reflecting since 2011, aggravated these differences, while the bulk of Lebanon's land trade was reduced and the tourists were under pressure, most of them Sunni Muslims, who fear the growing influence of the armed Shiite movement of Hezbollah.

This followed a state of political stalemate: after the death of Hariri, the government approved a new public budget last year and no parliamentary elections have been held since the elections of 2009 to May this year.

The economic growth, which was between 8 and 10 percent for the Syrian war, has been on average 1 percent to 2 percent since the outbreak of the war.

The country's debt amounts to 150 percent of the gross domestic product, mostly to local banks, which are partly dependent on remittances from Lebanese expats, partly attracted by attractive interest rates.

Khoury Home is a large company in Lebanon. Her stores, which are popular throughout the country, sell household appliances.

Roman Matthew says he tells his staff every year since he became chairman in 2013, which next year will be more difficult than before.

"We have reached 2018, the disaster of 2018, I think after what hardened in 2018, that is still hard for us."

In a move that could increase the difficulties that Matthew brings with it, last year the government reduced a number of incentives for banks on home loans, which contributed to the slump in the housing market. While fewer people buy homes, fewer people want new fridges or televisions.

But suffering does not include all companies. Michael Wright, chief executive of the Spinneys chain of supermarkets, said it had increased sales volumes because many of his goods had been imported from Europe and exchange rates had pushed prices.

"We are selling more, our sizes are going up, but this is being compensated by a fall in prices."

Since the May elections, there has been a keen debate between rival political parties about the formation of a new national unity government, with enough important parties to ensure political support from across the country.

In the absence of a new government, Lebanon can not implement the financial reforms needed to keep its debt under control or billions of dollars in foreign investments pledged in infrastructure to revitalize the economy.

In the meantime, interest rates have risen because the government is increasingly trying to attract higher bank deposits on which government debt is dependent, and high interest rates also hurt.


Source link

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