Lebanon’s domestic bank deposits are forecast to grow by a “conservative” $7 billion to $8 billion in 2019 compared with $5.6 billion in 2018, a senior Lebanese banker said on Wednesday.
Freddie Baz, a top executive at Bank Audi, said sentiment had improved in Lebanon since Prime Minister Saad al-Hariri formed a new national unity government in January, saying this “by itself triggers increased inflows”.
“So we assumed a conservative $8 billion increase in the deposit base is reasonable (for 2019) – around $7 billion to $8 billion,” Baz told Reuters.
Lebanon’s private-sector deposit growth is closely watched. The country, which has one of the largest public-debt burdens in the world, depends on financial transfers from its diaspora to finance its budget and current account deficits.
“The forecasted growth in deposits is beyond what is needed to cope with the additional financing needs of the domestic economy,” Baz said. Those needs were around $6 billion in total for both the public and private sectors, he said.
Baz, who is Bank Audi’s vice-chairman of the board of directors and group strategy director, said inflows would increase further if the government follows through on promised economic reforms.
Implementation of long-stalled reforms, including in Lebanon’s power sector, would “definitely translate into increased private inflows towards Lebanon”, he said.
“We are in a wait-and-see mode. We believe in (giving the new government) the grace period of the first 100 days.”
The government’s policy statement has committed to fast and effective reforms needed to put the public finances on a sustainable path.
International donor institutions and foreign governments want to see reforms before releasing some $11 billion in financial assistance pledged at a Paris conference last year.
Net profits at Bank Audi, which has subsidiaries in countries including Egypt, Turkey and Jordan, climbed by 8 percent in 2018 to $501 million.
Error: No connected account.
Please go to the Instagram Feed settings page to connect an account.