World Bank: Lebanon crisis among most severe since 1850's
World Bank says in a report that the crisis in Lebanon, both economically and financially, is likely to rank top 10 "most severe crises episodes globally since the mid-nineteenth century."
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The Lebanese Pound lost 85% of its value against the USD.
World Bank warned Tuesday that Lebanon is enduring an economic depression that might rank among the top 10 worst economic crises in the world since the mid-nineteenth century, in the absence of any solution on the horizon that would get it out of a reluctance reality exacerbated by political paralysis.
In a new report, World Bank said that real GDP in Lebanon, "Which is enduring a severe and prolonged economic depression," is projected to contract by a further 9.5% in 2021.
The report mentioned that "the economic and financial crisis is likely to rank in the top 10, possibly top 3, most severe crises episodes globally since the mid-nineteenth century."
Lebanon has witnessed a severe economic collapse since late 2019, which led to popular demonstrations caused by the difficult economic and living situation.
The exchange rate of the Lebanese pound against the dollar gradually declined until it lost more than 85% of its value, and more than half of the population became below the poverty line in light of a high unemployment rate.
Banque du Liban, the central bank of Lebanon, launched a platform to set the exchange rate of the LBP/USD exchange rate with the aim of "limiting the deterioration of the exchange rate of the pound, and reducing dependence on the black market." The Central Bank said that this platform aims to calm the market by involving banks and money changers in it, along with companies and individuals, to sell and buy dollars at a price close to the parallel market price.
Banque du Liban Governor Riad Salameh said that the central bank would not continue subsidizing medical supplies whose cost amounts to $1.3 billion, as it cannot continue importing them without compromising the mandatory reserves of banks. He also announced that he would not be able to continue subsidizing fuel, food commodities, and medicines after May because cash reserves have reached the mandatory amount.
