(MENAFN - Kuwait News Agency (KUNA)) The Lebanese economy has been gripped with an unprecedented crisis; the alarmingly mounting number of Syrian refugees forecast to exceed 1.5 million, more than 37 percent of the Lebanese population, according to a report issued by the official National News Agency (NNA) on Wednesday.
Despite the prevailing gloomy picture about the economy of this Mediterranean country, there have been recently some positive signs that may serve in favor of the ailing economy; such as formation of the national coalition government, two Saudi grants to the army - one totaling USD three billion and the second USD one billion, and the comeback of the ex-premier Saad Al-Hariri from abroad.
Some of the negative factors were failure to elect a new president, terrorist attacks that negatively impacted on the economy in general and the tourism sector in particular, soar of unemployment reaching 47 percent and lack of an adequate investment atmosphere. Furthermore, the national economy has proven again that it is very much vulnerable to
The International Monetary Fund, in a recently-released report, affirmed that lack of financial resources hindered structural reforms, affected interest rates, maintained the public debts constituting 150 percent of the domestic income. The report also shed light on various problems, such as the deficit in the electrical sector, estimated at 3,100 billion Lebanese pounds (one USD dollar equals roughly USD 1,500) per annum, advising that authorities need to tackle this sector, particularly power wasting, estimated at 50 percent in some areas.
Economic activity is forecast to remain week during the rest of the year, due to lack of solutions to the piling crises and continuation of the strife in neighboring Syria, where economic growth is predicted at 1.8 percent this year and 2.5 percent the next year.
According to the Beirut Traders Association-Fransa Bank Retail Index, businesses on the domestic market shrank 13 percent; however, some experts put it in the range of 30 percent.
Annual deficit of the trade balance was estimated at USD 209 million, due to decline of exports to USD 654 million from USD 1.6 billion. China came first among exporting countries to Lebanon and South Africa was on top of countries that import from Beirut.
Hotels' occupancy rate was estimated at 49 percent in the first half of the year, signaling continuing stagnation in the sector, considered the main foundation of the economy.
Lebanon's industrial exports shrank by 17.03 percent due to disruptions in land transportation and high costs of air and sea maritime shipping.
The real-estate sector dropped 1.05 percent, partly due to lack of foreigners' investment, however, well-off Lebanese in Diaspora continued to show interest in properties' purchases.
At the monetary level, the pound is forecast to remain stable due to abundant reserves of the central Bank, estimated at USD 37 billion, and high liquidity of foreign currencies in the banking sector.
Public debt is estimated at USD 65.70 billion. As to the banking sector it would grow at seven percent, due to depositors' confidence. The banks' lending fell due to persistent economic hazards and stagnation in the real-estate sector.
Dr. Ghazi Wazni, a prominent economist, predicted that the economic growth in the remaining months of the year would not exceed two percent due to retreat of the commercial sector by 20-25 percent.