Lebanon Economic Monitor, Spring 2013 : Growing Tensions in a Resilient Economy
The Lebanon Economic Monitor provides an update on key economic developments and policies over the past six months. It also presents findings from recent World Bank work on Lebanon. The political standoff combined with an escalating Syrian conflict...
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Format: | Report |
Language: | English en_US |
Published: |
Washington, DC
2015
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Online Access: | http://documents.worldbank.org/curated/en/2013/04/24412470/lebanon-economic-monitor-april-2013-growing-tensions-resilient-economy http://hdl.handle.net/10986/21967 |
Summary: | The Lebanon Economic Monitor provides an
update on key economic developments and policies over the
past six months. It also presents findings from recent World
Bank work on Lebanon. The political standoff combined with
an escalating Syrian conflict hampered growth in 2012, and
is projected to continue doing so through the first half of
2013. Economic growth in 2012 is estimated to have
decelerated to 1.4 percent due to a weak second half of 2012
following a downturn in the security situation. The major
fiscal expansion that took place in 2012 is creating fiscal
challenges for 2013, particularly in the context of a
promised increase in public salaries. The fiscal expansion,
measured by the change in the central government s primary
fiscal balance, reached a staggering 4.6 percentage points
of GDP in 2012. The overall fiscal deficit reached 9.4
percent of GDP in 2012. Inflationary pressures rose despite
tepid economic activity. Headline inflation accelerated
notably in the second half of 2012. Core inflation has also
been on an upward trend, reaching 5.3 percent by end-2012.
Domestically, inflationary pressures can primarily be
attributed to (i) increases in disposable income in early
2012 due to the increase in the minimum wage and public
sector salaries cost of living adjustment; and (ii) a
cumulative output gap that remains positive following
above-potential growth in 2007-2010. The conflict in Syria,
a country that is closely linked, both through historical,
social and economic ties to Lebanon has created a
humanitarian crisis of enormous scale. While Lebanon is to
be commended for its openness to Syrian refugees, the
conflict is severely and negatively impacting the Lebanese
economy. The largest impact arises through the insecurity
and uncertainty spillovers and touches at the heart of
Lebanon s societal fabric. |
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