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23 April 2024

Lebanon hopes to raise billions to keep economy afloat

Photo: AFP


Lebanon is hoping to raise billions of dollars at a France-led donor meeting on Friday to stave off an economic crisis in the world's third most indebted country.

Growth in the small Mediterranean country has plummeted in the wake of repeated political crises, compounded by the 2011 breakout of civil war in neighbouring Syria.

The Syrian war has sent one million Syrian refugees in flight to Lebanon, a country of only four million before the conflict.

The Paris conference comes as Lebanon gears up for its first general elections in almost a decade in May, after parliament renewed its own mandate three times since 2009.

The Middle Eastern country hopes donor countries and financial institutions at the CEDRE conference will help stimulate the economy through investment.

Lebanon hopes to raise "between $6 billion and $7 billion in the shape of credit facilities and funds," Nadim Munla, an adviser to Prime Minister Saad Hariri, has said.

Parliament last week adopted a 2018 government budget, projecting a deficit of $4.8 billion - more than double the deficit in 2011, when Syria's war started.

Economist Paul Doueihy says this growing budget shortfall means "the probability of a systemic crisis is now higher than ever".

To avoid bankruptcy, the state should "urgently" reduce its spending, he and others say.