Lebanon must work to counter an “unsustainable” fiscal deficit amid slow economic growth wrought by years of war in neighboring Syria, a top International Monetary Fund official told Reuters in a report published Wednesday.
“The Lebanese economy is not growing enough in order to stabilize the fiscal situation as well as also address [a] certain number of issues including the issue of refugees” from neighboring Syria, Jihad Azour, director of the IMF’s Middle East and Central Asia department said. Nearly one million U.N.-registered Syrian refugees currently reside in Lebanon.
The economy in Lebanon is growing slowly at a rate of 2 to 2-1/2 percent, Azour added, while the country suffers a large fiscal deficit, of 9 to 10 percent of its gross domestic product. Azour stressed that Lebanon must lower the deficit to 5 percent of GDP.
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Commenting on the more than $11 billion in grants and soft loans pledged to Lebanon at the CEDRE conference in Paris last month, Azour told Reuters the funds could push Lebanese leaders to “couple the investment program with the right fiscal adjustment as well as also the restructuring of some of the key sectors that are needed in order to see the economy growing back.”
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