This year is set to go down internationally in the annals of infamy. But compared with the Lebanese tempest, much of the planet has had a warm breeze. Since January, the Lebanese Pound (LBP) has slid from 2000 to 7500 to the dollar. In March, Lebanon defaulted on a sovereign debt payment for the first time (MEES, 13 March).
A banking meltdown triggered by the depletion of central bank reserves left some $80bn in US dollar-denominated deposits (around $13,000 per capita) ‘stuck’ in commercial banks – turning citizens’ savings accounts into meaningless digits on a balance statement. Left to their increasingly worthless Lebanese Pounds, annual inflation is running at 250% (including 570% on foodstuffs). In its October 2020 Regional Economic Outlook, the IMF projects Lebanon’s economy to contract 25% this year (see chart) – tied with Venezuela for the second worst globally behind Libya. (And with Libya putting in a late-year spurt – MEES, 13 November – Lebanon could yet finish rock bottom). (CONTINUED - 872 WORDS)