A study published by the World Bank estimates that Lebanon’s gross domestic product is expected to decline by 9.5% in 2021. This study takes into account various factors, such as the effects of the COVID19 epidemic but also a minimum of political and security stability and the formation of a government.
However, the scenario of the current recession in the Land of the Cedars could be quite hazardous due to the absence of a governor and a defined economic policy to carry out the necessary reforms.
GDP per capita could also decrease in parallel with the increase in the proportion of people most vulnerable to the economic crisis. All local social groups are thus affected by a drop in purchasing power but also by unemployment. 40% of the working population is thus currently unemployed against 28% during the pre-pandemic period.
This situation was induced by an economic depression due to inadequate economic policies and exacerbated by the COVID19 epidemic and the explosion in the port of Beirut, note the authors of this report.
This information already follows a 20.3% contraction of the Lebanese economy in 2020, while the deterioration of the Lebanese pound against the dollar would have reached 129% in 2020. The money supply would have increased by 227% and the inflation rate would have reached 84.3%.
The banking sector is also affected with the virtual halt in lending and is unable to attract deposits. For the time being, the adjustment of bank losses is carried out to the detriment of small depositors and small and medium-sized enterprises.
The social impact is significant, with more than half of the population now living below the poverty line and food shortages for 41% of the population or even difficulties in obtaining treatment for 36% of those questioned against 25% during the survey. previous survey.
