Lebanon's banks not affected by strife in the region
Central Bank governor Riad Salameh said Wednesday that Lebanese banks are immune to any negative fallout from the events unfolding in the region.
“Lebanese banks are immune to the current events in the region thanks to the initiatives and measures adopted by the Central Bank in collaboration with international monitoring authorities,” Salameh told reporters during a news conference to announce the launch of the Arab Economic Forum in Beirut on May 10.
Salameh stressed that local markets were receptive to the measures, as evidenced by the rise of flows to Lebanon and the conversion from U.S. dollars to Lebanese pounds. He revealed that the balance of payments in March had achieved a surplus, projecting the growth in customer deposits at the end of 2012 to reach 8 percent.
“We have intervened in the market in the last four months and bought $800 million. This is a reflection of confidence in the banking sector and the Lebanese pound,” he said. Salameh also commented on the visit to Lebanon of the Assistant U.S Secretary of State Jeffry Feltman, who might raise the issue of economic sanctions in Iranian and Syrian banks.
He assured that the Central Bank had issued a circular to all local banks in April to remind them that they should respect U.S. and European sanctions on Syrian and Iranian banks. Salameh reiterated that the Lebanese state does want to open a window for not respecting the law.
Salameh declined to make any projections on Gross Domestic Product (GDP) growth this year. “The Central Bank does not give its projection before the month of July, because the Lebanese economy usually fluctuates every season,” he said.
In its semiannual economic outlook for the Middle East and Central Asia region, the International Monetary Fund (IMF) revised downward its projection of Lebanon’s real GDP growth for 2012 to 3 percent from a February forecast of 3.5 percent.
It also forecast Lebanon’s real GDP growth at 4 percent in 2013, compared to 3.7 percent in MENA countries, 3.6 percent for oil importers and 3.4 percent in Mashreq economies. Lebanon’s projected growth rate in 2012 would make it the eighth fastest growing economy in the Arab world, according to IMF.
Lebanon would be the 103rd fastest growing economy in the world in 2012, and would grow at a similar rate as that of Australia, Brazil, Belarus and Ukraine. The Fund estimated the country’s nominal GDP at $41.8 billion in 2012 relative to $39 billion in 2011, which would account for 12.8 percent of the Mashreq region’s aggregate GDP.
It projected Lebanon’s inflation rate to average 4 percent in 2012 compared to 10 percent in MENA economies, 7.7 percent for the region’s oil importers and 9.8 percent in Mashreq countries. Also, it forecasts broad money to grow by 9 percent in each of 2012 and 2013, up from 7.2 percent in 2011.
Lebanese banks have managed to weather global recessions, as well as political turmoil in the region, as successive governments and financial authorities adopted prudent policies to keep the Lebanese pound stable.
- Integrating Islamic finance: challenges ahead for the global sukuk market
- Restoring confidence: Can S&P bank upgrade help Lebanon's economy?
- Getting their priorities straight: Emirati households spending more on phones, cars than education
- Why Qatar stocks hit six year high this week
- Are Arab Bankers right to blame the region's deteriorating economies on the Arab Spring?