Salameh says growth in economy will be negative in 2013

The “An-Nahar” daily was able to obtain a copy of the presentation that Lebanon’s Central Bank bank governor Riad Salameh made to the cabinet last week in which he warned of the consequences of the increases in salaries and ranks and stressed that the growth of the economy will be negative in 2013 and that the public debt and job opportunities will face difficulties .

Here is a summary of what Salameh told the cabinet :

– Inflation will go up to 6 percent this year, excluding any increase in salaries and ranks.

– The deficit was 2 billion Dollars at the end of September and cold hit $2.6 billion by the end of this year .

– Salameh expressed concern that the interest rates may have to be increased by one percentage point as a result of the inflation , deficit and salary increases knowing that each one percentage point will increase debt service by more than $ 560 million annually.

  • Hannibal

    With all the hash being sold? How could this be? 
    The big question is: Will the government resign over this failure?

    • http://profiles.google.com/wp.karam Ghassan Karam

       Hannibal,
                    The large sums of drugs generated income is not declared :-) but yet is an important anchor for the economy. It does keep a large number of farmers away from absolute poverty and the expenditures by the major traffickers do create some jobs in construction, restaurants and home services. 

  • Hannibal

    With all the hash being sold? How could this be? 
    The big question is: Will the government resign over this failure?

    • http://profiles.google.com/wp.karam Ghassan Karam

       Hannibal,
                    The large sums of drugs generated income is not declared :-) but yet is an important anchor for the economy. It does keep a large number of farmers away from absolute poverty and the expenditures by the major traffickers do create some jobs in construction, restaurants and home services. 

  • http://profiles.google.com/wp.karam Ghassan Karam

    This is a good sign. Finally a responsible official has decided to reject denial and face the facts. The writing has been on the wall for over a year. The Lebanese sovereign debt is NOT sustainable and the relative prosperity rests on very weak basis and special circumstances. (1) Lebanese abroad might not send as much of their savings/earnings to Lebanon (2) A higher interest rate on the national debt is inevitable (3) Tourism requires at a minimum a reliable infrastructure and is affected by the political stability domestically and regionally (4) Inadequate income tax collection system (5) No conducive environment for foreign investment ….

    • Hannibal

      Dire indeed…

  • http://profiles.google.com/wp.karam Ghassan Karam

    This is a good sign. Finally a responsible official has decided to reject denial and face the facts. The writing has been on the wall for over a year. The Lebanese sovereign debt is NOT sustainable and the relative prosperity rests on very weak basis and special circumstances. (1) Lebanese abroad might not send as much of their savings/earnings to Lebanon (2) A higher interest rate on the national debt is inevitable (3) Tourism requires at a minimum a reliable infrastructure and is affected by the political stability domestically and regionally (4) Inadequate income tax collection system (5) No conducive environment for foreign investment ….

    • Hannibal

      Dire indeed…

  • plomca

    Amazing, that the Lebanon with abundance of resources, (water, minerals and especially farming) can have a negative growth. But, their neighbor to the south, Israel, with less water, no oil, practically a desert , will have one of the strongest growth in the world, along with Norway, Australia, New Zealand and Canada, according to the Paris-based Organization for Economic Co-operation and Development.

    How is it, two countries like Lebanon and Israel, about equal in size and population, can be in opposite ends, when it comes to economic growth? And where people are emigrating to Israel, while Lebanese are leaving in masses to the Gulf countries for work or immigrating to Europe or North America.

    Lebanon has great potential for future growth and prosperity. But when the government is controlled by Hezbollah, it nothing but corruption and greed that will weaken the state economy. And the poor ordinary Lebanese citizens will be the ones to suffer.

    • Hannibal

      That is why the minute the U.S. cut off the umbilical chord you will go back like the Arabs into a bedouin Camel riding tent dwelling life…

    • http://profile.yahoo.com/QUHCMQH262LEGPZCMEGORVMP2I Preview

       LMFAO like Hannibal said but i will add more, yankee aid to the tune of BILLIONS per year is what is keeping that illegal entity with “the strongest growth”. Amazing how you missed that “little” point.

  • plomca

    Amazing, that the Lebanon with abundance of resources, (water, minerals and especially farming) can have a negative growth. But, their neighbor to the south, Israel, with less water, no oil, practically a desert , will have one of the strongest growth in the world, along with Norway, Australia, New Zealand and Canada, according to the Paris-based Organization for Economic Co-operation and Development.

    How is it, two countries like Lebanon and Israel, about equal in size and population, can be in opposite ends, when it comes to economic growth? And where people are emigrating to Israel, while Lebanese are leaving in masses to the Gulf countries for work or immigrating to Europe or North America.

    Lebanon has great potential for future growth and prosperity. But when the government is controlled by Hezbollah, it nothing but corruption and greed that will weaken the state economy. And the poor ordinary Lebanese citizens will be the ones to suffer.

    • Hannibal

      That is why the minute the U.S. cut off the umbilical chord you will go back like the Arabs into a bedouin Camel riding tent dwelling life…

    • http://profile.yahoo.com/QUHCMQH262LEGPZCMEGORVMP2I Preview

       LMFAO like Hannibal said but i will add more, yankee aid to the tune of BILLIONS per year is what is keeping that illegal entity with “the strongest growth”. Amazing how you missed that “little” point.