2014年-世界发展银行全球_Lebanon_Economic_Monitor_Spring_2014___A_Sluggish_Economy_in_a_Highly_Volatile_Environment_50页_4mb

LEBANON ECONOMIC MONITOR: SPRING 2014

Core Content Overview

The Lebanon Economic Monitor (Spring 2014) provides an analysis of Lebanon's economic performance and policy developments over the past six months, placing them in a broader global and regional context. The report highlights the impact of the ongoing Syrian conflict and security instability on Lebanon's economy, as well as the effects of political uncertainty and fiscal challenges. It also introduces new economic indicators developed by the World Bank—WB-CI (Coincident Indicator) and WB-LI (Leading Indicator)—to better assess economic trends, given the lack of timely national economic data.

Main Economic Developments

Output and Demand

• Economic activity remained weak in 2013, with real GDP growth estimated at 0.9%, the lowest since 1999.
• The tourism, wholesale, and retail trade sectors were heavily impacted by security spillovers from the Syrian conflict and travel advisories from key tourist markets.
• Consumer confidence dropped by 17.2% in 2013, and investment activity declined, as reflected by a 12% drop in construction permits.
• Business conditions worsened, with Lebanon ranking 111th in the World Bank's Ease of Doing Business index in 2014, down from 105th in 2013.

Labor Markets

• The labor market weakened due to the influx of Syrian refugees, increasing the labor supply by 30% in 2013.
• Youth unemployment exceeded 22%, and informality remained high, accounting for over 56% of total employment.
• Skills mismatches and low-quality jobs persisted, contributing to social tensions between refugees and the local population.

Fiscal Policy

• Fiscal deficit widened to 9.5% of GDP in 2013, driven by a 1% drop in revenue and a 0.2% decrease in expenditures.
• Primary deficit continued for the second year, reflecting weak tax collection (especially on income, VAT, and tobacco excises) and non-tax revenue shortfalls.
• The government financed the deficit through Treasury bills and Eurobonds, with the latest issue being a $1.6 billion TB in September 2013.
• Public debt reached $63.5 billion (143.1% of GDP) by end-2013, up from $57.7 billion (133.5% of GDP) in 2012.

Monetary Policy, Banking, and Prices

• Measured inflation declined in 2013, with headline CPI averaging 2.6%, a 3.1 percentage point drop from 2012.
• Core inflation (excluding fuel and food) also eased, reflecting below-potential GDP growth and the waning effect of 2012 salary increases.
• The Banque du Liban (BdL) maintained an expansionary monetary policy, sustaining confidence in the Lebanese pound.
• The dollarization rate of deposits increased by 1.3 percentage points to 66.1% in 2013, indicating a modest decline in confidence in the local currency.
• Commercial banks remained resilient, despite credit downgrades and sluggish economic activity, with assets growing from 8.0% (yoy) in 2012 to 8.5% (yoy) in 2013.
• Deposits at commercial banks continued to rise in 2013, and sovereign debt exposure increased.

Financial Markets

• Eurobond spreads widened due to increased risk premiums, indicating uncertainty in the financial markets.
• The equity market weakened in 2013, reflecting economic instability.
• The balance of payments remained in deficit for the third consecutive year, with a 2.5% of GDP deficit in 2013, attributed to reduced tourism and investment inflows.

Prospects for 2014

• Real GDP growth for 2014 is projected at 1.5%, assuming political uncertainty is resolved and the security situation improves slightly.
• The balance of risks to growth is tilted to the downside, with necessary reforms (e.g., fiscal sustainability, infrastructure development, and private sector growth) significantly delayed.
• The new government formed in February 2014 is seen as a positive development, but uncertainty remains due to upcoming presidential and parliamentary elections.

Special Focus

Sovereign Wealth Fund (SWF) for Lebanon

• Lebanon is required to establish an SWF under the 2010 Hydrocarbon Law, but delays persist due to political and institutional challenges.
• Key recommendations for the SWF include:
  • Integration with the budget system.
  • Limited flexibility in operational rules.
  • No extra-budgetary spending.
  • Coherence with the country’s investment strategy.
  • Transparency and accountability in governance.
• The SWF is seen as a potential tool to manage hydrocarbon revenues and enhance fiscal stability.

New Coincident and Leading Indicators

• The WB-CI and WB-LI are high-frequency indicators developed by the World Bank to improve economic analysis.
• The WB-CI shows a deceleration in economic activity during the first ten months of 2013, which may warrant a different monetary policy than the BdL-CI.
• The WB-LI is a forecasting tool with accurate predictions for economic activity, with private sector deposits and personnel costs having the highest weights in its composition.

Key Challenges and Risks

• Security instability and political uncertainty continue to hinder economic growth and investment.
• Fiscal sustainability remains a major concern, with high debt-to-GDP ratios expected to rise in 2014 and 2015.
• Structural weaknesses in the labor market, infrastructure, and private sector development are delayed due to ongoing political stalemate.

Conclusion

The Lebanon Economic Monitor highlights the fragile state of the economy in the context of a volatile security environment and ongoing political instability. Despite some positive developments, such as the formation of a new government, the economic outlook remains uncertain. The World Bank emphasizes the need for reforms in fiscal policy, infrastructure, and private sector development to restore economic growth and stability. The introduction of new economic indicators is seen as a crucial step in improving economic analysis and policy-making in the country.