Lebanon prepares stimulus as fighting continues in Syria
Lebanon’s Central Bank Governor, Riad Salameh, is expected to announce a stimulus package
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Lebanon’s Central Bank is putting a stimulus package in place to boost its bruised economy, which has taken a hit by its troubled neighbour Syria
Lebanon’s Central Bank Governor, Riad Salameh, told Dow Jones News Wires that the Bank of Lebanon is putting the finishing touches to a program aimed at boosting the housing market and spurring construction.
The Central Bank will finalise the programme's details, including its size, in December, Salameh is quoted as saying.
The programme, to be launched next year, will allow banks to tap cheap Central Bank credit to fund mortgage lending and drive growth.
"We believe once demand is higher in the housing sector it is going to drive all other sectors to better activity," Salameh told the newswire.
Salameh is quoted as saying that the Central Bank has instructed its lenders to respect international sanctions against the Syrian regime, and that Lebanon and its banks are also complying with international sanctions against Iran.
Salameh also reportedly said that Beirut aims to build a capital market focused on start-up enterprises and small businesses. Oil and gas production and associated services will be key sectors targeted, he is quoted as saying.
An important part of the plan is to privatise the Beirut stock exchange, which should happen sometime in the next two years, the newswire reported.
"Our experience in Lebanon taught us that you have to operate, not to wait until everything is clear and quiet, because you would lose opportunities and lose time. It's like asking Japan not to do anything until they don't have earthquakes," Salameh told Dow Jones Newswires.
Annual inflation in Lebanon is expected to be around six per cent for 2012, reflecting higher energy prices, Salameh reportedly said. The Central Bank aims to keep inflation at four per cent, and officials will drain liquidity from the banking system to hit their target next year if public sector wage increases threaten to keep inflation above target, Salameh is quoted as saying.
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