Lebanon’s economy still contracting but at slower pace, World Bank says

BEIRUT, Nov 24 (Reuters) – Lebanon’s economy, hit by one of the world’s worst crises, continues to contract although the pace of that contraction has slowed somewhat, the World Bank said in a report released Wednesday.

Real gross domestic product (GDP) – a measure of the total value of a country’s economy – in the small Mediterranean country is expected to contract by 5.4% in 2022 amid political paralysis and delays in the implementation of an economic recovery plan.

The World Bank said it had revised its estimate of Lebanon’s economic contraction in 2021 to 7% from a previous estimate of 10.4%.

Its estimate for 2020 remained unchanged at 21.4%.

Lebanon currently has no president or fully empowered government, an unprecedented institutional vacuum that observers say could take months to resolve.

Interim Prime Minister Najib Mikati said the country could still finalize a deal with the International Monetary Fund for a $3 billion program through parliament.

But the World Bank said such a deal remains unlikely around seven months after Beirut struck a staff-level deal with the lender of last resort.

“An IMF program remains elusive… A fragmented parliament, coupled with a government and presidential vacuum, casts further doubt on the ability to complete prior actions and secure a final deal in the coming months.”

Reporting by Timour Azhari Editing by Alex Richardson

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