Lebanon’s economic woes deepen

Despite the urgency, Hariri left Lebanon Friday to celebrate his wedding anniversary in Europe, according to LBCI.
by Georgi Azar

2 August 2019 | 19:29

Source: by Annahar

  • by Georgi Azar
  • Source: Annahar
  • Last update: 2 August 2019 | 19:29

A file photo of President Michel Aoun and Prime Minister Saad Hariri at the Baabda Presidential Palace (AP)

BEIRUT: As Lebanon’s economic uncertainty lingers well into 2019, President Michel Aoun urged Prime Minister Saad Hariri to convene the Cabinet after more than a month of paralysis.

Discord continues to mire the government, which hasn’t convened since the deadly shooting in Aley on June 30.

Hariri, fearing further political divide, has shown restraint in convening the 30-man Cabinet.

The altercation has pitted the Progressive Socialist Party and its allies, the Lebanese Forces and Future Movement, against the Lebanese Democratic Party, Free Patriotic Movement and Hezbollah.

With the 2019 state budget coming into effect after Aoun penned his signature last week, the government is now facing a myriad of obstacles to carry Lebanon out of its slump.

Despite the urgency, Hariri left Lebanon Friday to celebrate his wedding anniversary in Europe, according to LBCI.

Speaking on Thursday to mark the 74th anniversary of the Lebanese Army, the president sounded the alarm over the small Mediterranean country’s financial state.

« The biggest threat facing Lebanon is its economic struggles,» he said, urging the Lebanese to make sacrifices.

Reuters said Aoun "appeared to raise the possibility of Lebanon having to go to the International Monetary Fund for help if government reform efforts failed to bring enough improvement to state finances," adding that the president's comments were followed by a spike in the cost of insuring exposure to Lebanon’s sovereign debt.

The president’s office denied that Aoun raised the possibility of requesting IMF help.

A day after Aoun's comments, Lebanon’s five-year credit default swaps (CDS) jumped to 990 basis points (bps), up 33 bps from Thursday’s close, data from IHS Markit showed.

Financial institutions, including the International Monetary Funding, have called on Lebanese officials to implement drastic structural reforms to strengthen the financial sector.

The IMF’s regional director, Ziad Azour, also met with Aoun at the Baabda Presidential Palace on Thursday to discuss the latest developments, including the upcoming 2020 budget.

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