Falling oil prices hurt Lebanese economy too says Salameh


riad salamehYou would think that Lebanon would  benefit  greatly from the falling oil prices  , since  it  import all its  needs , but not according to  Central Bank Governor Riad Salameh.

According to him  falling oil prices reduce the remittances Lebanon  receives from  the Lebanese people who work  in the Arabian Gulf countries .

Salameh  said the bank is introducing measures to prevent a crisis from erupting.

“The most notable of economic challenges that Lebanon and the Lebanese Lira will face in 2015 is the decrease in oil prices, which affects the economies of the Gulf,” Salameh said in remarks published Monday.

Salameh said the Gulf is the most important source  of remittances” for Lebanon, , since  60 percent of the total amount that enters the Lebanese economy comes from Gulf countries.

He said Lebanon’s economy will do fine as long as trust remains in Lebanese banks, which he described as the “basis of monetary stability.”

The World Bank in a report last month projected expatriates’ remittance inflows to Lebanon would reach $7.67 billion in 2014, constituting an increase of 1.6 percent from $7.55 billion in 2013.

Lebanon would be the 18th largest recipient of remittances globally and the 13th largest recipient among 135 developing economies in 2014, according to the report.

Lebanon should rely on sustainable local production to move the economy, and not remittances from expats, Foreign Minister Gebran Bassil said during a trip to Ghana in which he met with the Lebanese community there.

Bassil said his country should “reactivate” agriculture and industry by introducing a set of economic policies to create an environment that allows the two sectors to prosper.

“The money sent to Lebanon expats is estimated to be around $7-8 billion [annually] that contribute to enable Lebanon’s survival,” Bassil said as he was addressing a crowd of expatriates in a gathering held by Lebanese Ambassador to Ghana, Ali al-Halabi. “But Lebanon should not merely depend on aid.” He said