LEBANON: Economists warn of a deteriorating economy as Lebanon's political leaders fail to form a government after 2.5 months of consultations

Record ID: 429791

  • Title: LEBANON: Economists warn of a deteriorating economy as Lebanon's political leaders fail to form a government after 2.5 months of consultations
  • Date: 14th April 2011
  • Summary: BEIRUT, LEBANON (APRIL 12, 2011) (REUTERS) WIDE OF BEIRUT COASTLINE VARIOUS OF BUILDINGS UNDER CONSTRUCTION VARIOUS OF SEMI-DEMOLISHED BUILDING CRANE BEIRUT, LEBANON (FILE) (REUTERS) SECURITY FORCES OUTSIDE PARLIAMENT BUILDING LEBANESE PRIME MINISTER DESIGNATE NAJIB MIKATI ENTERING PARLIAMENT BUILDING MIKATI WITH OFFICIALS LEBANON'S CARETAKER PRIME MINISTER SAAD AL-HARIRI WALKING IN BEIRUT, LEBANON (RECENT) (REUTERS) VARIOUS EXTERIORS OF BYBLOS BANK HEADQUARTERS CUSTOMERS INSIDE BANK VARIOUS OF BANK TELLERS BANK TELLER COUNTING LEBANESE POUNDS BY HAND MACHINE SORTING AMERICAN DOLLARS WIDE OF NASSIB GHOBRIL, HEAD OF ECONOMIC RESEARCH AND ANALYSIS DEPARTMENT AT BYBLOS BANK (SOUNDBITE) (Arabic) NASSIB GHOBRIL, BYBLOS BANK ECONOMIST, SAYING: "Nothing is falling apart but there are a lot of things that are postponed. There is paralysis and there are a lot of things postponed. The subjects of reform, cost of living, development- are all very pressing. Today, the caretaker government can't make any decisions. Even the budget- it can't even study the budget of 2011." WIDE OF GHOBRIL SITTING AT DESK (SOUNDBITE) (Arabic) NASSIB GHOBRIL, BYBLOS BANK ECONOMIST, SAYING: "This is the main point. We are seeing a regression in consumer confidence. And our economy in Lebanon is built on the private sector, which compromises about 60 percent of economic activity in Lebanon." BEIRUT, LEBANON (APRIL 12, 2011) (REUTERS) TWO WOMEN AT A COFFEE SHOP, SITTING OUTSIDE
  • Embargoed: 29th April 2011 13:00
  • Keywords:
  • Location: Lebanon, Lebanon
  • Country: Lebanon
  • Topics: Economic News,Domestic Politics
  • Reuters ID: LVAAZ9UD58RE17DE6T5WI0YWSJ4H
  • Story Text: The collapse of Saad al-Hariri's government in January 2011 combined with continued, yet still fruitless, efforts to form a new government by Lebanon's Prime Minister Designate Najib Mikati is taking it's toll on the country's economy.
    Mikati, who is backed by the Hezbollah-led March 8 alliance, has been accelerating his meetings and consultations with local officials in the past week in the hopes of forming his new government.
    Mikati was appointed on Jan. 25 to form a new government to replace caretaker Prime Minister Saad al-Hariri's toppled Cabinet.
    Nearly three months on and Lebanon is still waiting.
    According to Nassib Ghobril, head of the economic research and analysis department at Beirut's Byblos Bank, it is the economy that is suffering the most at present.
    "Nothing is falling apart but there are a lot of things that are postponed. There is paralysis and there are a lot of things postponed. The subjects of reform, cost of living, development- are all very pressing. Today, the caretaker government can't make any decisions. Even the budget- it can't even study the budget of 2011," he said.
    "We are seeing a regression in consumer confidence. And our economy in Lebanon is built on the private sector, which compromises about 60 percent of economic activity in Lebanon," he continued.
    However for some in Beirut, matters seem to unchanged. A resident of the city who would not give his name told Reuters TV that life continues as normal- with or without a government.
    "Everything is the same. Gas prices are still going up and bread supplies are going down. Inflation is going up and people are going about their business in a normal way. With or without a government, it's all the same," he said.
    Others like taxi driver Meshaik, are feeling the pinch to their purse-strings.
    "Business is slow. There is no work. No work at all. If anyone has some savings, they are spending from that," he said.
    Mikati still needs approval for his proposed 30-member Cabinet lineup and despite his camp echoing an optimistic tone that the impasse will be solved soon, residents and economists seem more skeptical and cynical that any solutions are imminent.
  • Copyright Holder: REUTERS
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