Beirut:
Lebanon’s financial collapse is most likely to rank amongst the the world’s worst economic crises because the mid-19th century, the World Bank stated in a damning report released Tuesday.
The report predicts that Lebanon’s economy will shrink by close to 10 % in 2021 and stresses there is “no clear turning point in the horizon”.
Lebanon defaulted on its debt last year, the currency lost about 85 % of its worth and poverty is devastating a nation when seen as a beacon of prosperity in the area.
“The economic and financial crisis is likely to rank in the top 10, possibly top 3, most severe crisis episodes globally since the mid-nineteenth century,” the report stated.
The most up-to-date World Bank Lebanon Economic Monitor report, entitled “Lebanon Sinking: To the Top 3”, stated such brutal financial collapses are normally the outcome of war.
The full meltdown of Lebanon’s economy more than the previous 18 months is extensively blamed on corruption and mismanagement by the country’s hereditary political elite.
“Policy responses by Lebanon’s leadership to these challenges have been highly inadequate,” the report says.
Lebanon’s ruling class has failed to act on the country’s worst emergency in a generation, which was compounded by the coronavirus pandemic and a devastating explosion at Beirut port last August.
“The increasingly dire socio-economic conditions risk systemic national failings with regional and potentially global effects,” the World Bank stated.
The International Monetary Fund has presented help but the country’s political barons have failed to even kind a government that could provide the reforms on which foreign help is conditioned.
“Subject to extraordinarily high uncertainty, real GDP is projected to contract by a further 9.5 percent in 2021,” according to the World Bank, dashing any hopes of a fast recovery.
According to the monetary institution, the economy contracted by 6.7 % in 2019 and 20.3 % in 2020.
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