LEBANON

Lebanon is facing a dangerous multifaceted crisis: an economic, financial, and socio-political one. The country has been living beyond its means for years, running double digit current account and fiscal deficits (averaging respectively 18% and 9.5% of GDP per annum during 2002-18) in an environment of anaemic growth. It relied on borrowing and attracting non-residents[1] deposits (mainly from the diaspora) to its banking system in order to fund these twin deficits and maintain an unsustainable currency peg at an increasingly prohibitive cost. Acute levels of state capture and weakened accountability mechanisms perpetuated loose fiscal discipline and increased budget rigidity bringing debt to 175% of GDP in 2019. Debt monetization through costly financial engineering operations since 2016, weakened the balance sheet of the sovereign, the Banque du Liban (BDL) and banks', precipitating a sudden stop of capital that exacerbated a pestering currency and banking crisis... Finding a way..

Also known as: Lebanon Inc