Growth driven by high capital inflows
Lebanon’s economy will grow by up to 8 per cent this year owing to high capital inflows, according to central bank governor Riad Salameh.
Deposits in the banking system rose 2.5 per cent from January to March to stand at $105bn, 63 per cent of which is in foreign currencies. Salameh forecast that deposits will rise by 10 per cent over the course of the year owing to high confidence in Lebanon’s banking system.
“We have high liquidity and this has helped bolster confidence,” said Salameh speaking at an economic forum in Lebanon on 20 May.
Inflation is expected to remain stable at between 4 and 5 per cent this year. It currently stands at 4.5 per cent.
In March this year, the government said it would go ahead with plans to privatise the electricity and telecoms sector. The privatisations should help Beirut tackle its massive debt, which stands at 148 per cent of gross domestic product (GDP).
Capital inflows, especially from Lebanese expatriates, contributed to 9 per cent GDP growth last year.