The promises of reforms of the leaders struggle to convince the Lebanese, who are going through a period of economic slump and fear a financial crisis.
Ibrahim smiles when we talk to him "The state of economic emergency" announced by the Lebanese authorities in early September. "Words, speeches … It's been several years since we've been in a difficult economic situation"recalls the manager of a coffee shop in the souks of Beirut, an upmarket shopping center in the heart of the capital.
Hardly summer was better, thanks to the "Return of Gulf tourists, who have a stronger purchasing power. But our Lebanese clientele, well off, consumes less. There is a problem of trust in the future. "
In 2018, the country's economy grew by just 0.2%, according to the International Monetary Fund (IMF). New car sales declined by more than 20% in the first seven months of 2019. "Given the interest rates, up to 12% for deposits in Lebanese pounds and 8% for those in dollars offered by the banks, those who have a little money prefer to block it in deposit », says a sales manager at a car dealership in the west of the city.
Real estate, one of the pillars of the economy, is struggling. "As long as there are not, at least, loans available at a reasonable rate, it is impossible for the market to resume. It has shrunk since 2008: it is now mainly local ", says Joe Kanaan, CEO of real estate company S-Gestion.
The economic slump is now coupled with the fear of a major financial crisis, and the fear of a devaluation of the Lebanese pound. Its parity is fixed at the US dollar, at the rate of 1,507.5 pounds for 1 dollar, and both currencies are used. The balance of payments deficit reached 5.3 billion dollars (4.82 billion euros) over the first seven months of the year. State debt is one of the highest in the world, accounting for more than 150% of gross domestic product (GDP) in 2018. However, to finance the balance of payments and the debt service, and maintain the stability of the Lebanese pound, constant inflows of capital, and therefore of foreign exchange, are necessary.
The book is overvalued
pointing "The growing pressure on the Lebanese financial model and the risks concerning the government's ability to service the debt", the international agency Fitch downgraded the country's rating to CCC in August. Standard & Poor's also warned of a possible deterioration of the sovereign rating in the coming months "Whether bank deposits and foreign exchange reserves of the Bank of Lebanon (central bank) continue to decline. "