BEIRUT: Lebanon’s economy is sinking into a “deliberate depression,” the World Bank said Tuesday in a damning report stressing the authorities’ failure to tackle the crisis.
The fall 2020 edition of the Lebanon Economic Monitor predicted the economy will have contracted by 19.2 percent this year and projected a debt-to-GDP ratio of 194 percent next year.
“A year into Lebanon’s severe economic crisis, deliberate lack of effective policy action by authorities has subjected the economy to an arduous and prolonged depression,” a World Bank statement said.
Lebanon’s economy started collapsing last year as a result of years of corrupt practices and mismanagement.
The crisis was made worse by a nationwide wave of anti-government protests that paralyzed the country late last year and the Covid-19 pandemic this year.
The August 4 Beirut port blast, one of the largest non-nuclear explosions in history, brought the country to its knees and further fueled public distrust.
“Lebanon is suffering from a dangerous depletion of resources, including human capital, with brain drain becoming an increasingly desperate option,” the World Bank warned.
In 2020, Lebanon defaulted on its debt, banks imposed capital controls and inflation has reached triple-digit rates, dragging the country into its worst ever economic crisis.
Instead of taking emergency measures to rescue the economy, Lebanon’s political elite has continued to dither and bicker.
The previous government headed by Hassan Diab failed to adopt ambitious policies to tackle the crisis. It resigned under pressure over the blast nearly four months ago and a new cabinet has yet to be formed.
“Lack of political consensus on national priorities severely impedes Lebanon’s ability to implement long-term and visionary development policies,” said Saroj Kumar Jha, World Bank regional director.
He called for the quick formation of a new government capable of implementing short-term emergency measures and addressing long-term structural challenges.
“This is imperative to restore the confidence of the people of Lebanon,” he said.
An annual index compiled by Gallup that tracks people’s experience of stress and sadness said “no other country in the world saw negative experiences skyrocket across the board as much as Lebanon.”
The Negative Experience Index’s data was collected before the Beirut port blast, Lebanon’s worst ever peace time disaster.
Lebanon plunged into ‘deliberate depression’: World Bank
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Lebanon plunged into ‘deliberate depression’: World Bank
- The fall 2020 edition of the Lebanon Economic Monitor predicted the economy will have contracted by 19.2 percent this year
- Lebanon’s economy started collapsing last year as a result of years of corrupt practices and mismanagement
Qatar’s inflation drops 1.15% as key costs fall
RIYADH: Qatar’s inflation eased by 1.15 percent year on year in January, with the consumer price index settling at 107.45 points, driven by declines in food, housing, and transport costs, official figures showed.
According to the National Planning Council’s latest report, the monthly CPI also dropped by 2.53 percent, primarily due to a decline in housing, water, electricity, and other fuels — which fell by 2.53 percent from December.
The slide comes as Qatar is projected to record the lowest inflation in the Gulf Cooperation Council region this year, averaging 1.4 percent — below the GCC’s 1.9 percent and the wider Arab region’s 8.5 percent, according to Kamco Invest.
The International Monetary Fund expects Qatar’s inflation to stabilize around 2 percent over the medium term, supported by LNG expansion, public investment, and a strengthening tourism sector, according to a release in February.
The National Planning Council’s report stated: “Reviewing the main changes in the CPI for the month of January 2025 compared with the previous month, findings show five categories decreased, six categories increased, and stability in one category.”
Food and beverage prices recorded a 2.75 percent monthly drop, while recreation and culture saw the sharpest decline at 14.87 percent. Clothing and footwear prices fell by 1.13 percent, and furniture and household equipment dipped 0.77 percent. The restaurants and hotels sector also saw a slight decrease of 0.55 percent.
Conversely, several categories recorded price increases including miscellaneous goods and services which rose by 1.93 percent, health by 0.91 percent, and transport by 0.61 percent.
Housing, water, electricity, and other fuels saw a slight uptick of 0.11 percent, while communication and education prices remained relatively stable, with marginal increases of 0.09 percent and 0.02 percent, respectively. Tobacco prices remained unchanged.
Year-on-year figures showed notable shifts across key sectors, with the annual CPI declining by 1.15 percent.
The drop was mainly driven by a 5.44 percent decrease in food and beverage prices, while housing, water, electricity, and other fuels fell by 4.67 percent.
Recreation and culture recorded a decline of 4.29 percent, followed by restaurants and hotels, which dropped by 1.82 percent.
Furniture and household equipment fell by 1.73 percent, while transport costs were down by 1.01 percent.
At the same time, miscellaneous goods and services surged 7.92 percent, communication saw a sharp increase of 18.68 percent, and clothing and footwear rose 1.91 percent.
Education costs climbed 1.70 percent, while health recorded a slight increase of 0.04 percent.
The CPI excluding housing, water, electricity, and other fuels stood at 111.76 points in January, reflecting a monthly decline of 3.09 percent and an annual drop of 1.80 percent.
Despite the minor downward adjustments across multiple sectors, the council emphasized that consumer prices remain stable, with inflation largely contained within expected levels.
Jordan’s economy to expand by 2.7% in 2025: Central Bank governor
- Adel Sharkas said inflation reached 2.2% in the first two months of the year and is expected to stabilize at 2% for 2025
- Jordan attracted foreign direct investments valued at $1.3 billion during the first three quarters of 2024
RIYADH: Jordan’s economy is expected to grow 2.7 percent in 2025, further accelerating to 3.5 percent in the medium term, according to the governor of the country’s central bank.
Adel Sharkas made the comments in the wake of credit rating agency S&P Global stating that Jordan’s GDP expansion will be driven by the recovery of the tourism sector, as well as increasing trade relationships with Syria and Iraq.
The central bank governor added that inflation in Jordan reached 2.2 percent in the first two months of this year and is expected to stabilize at 2 percent for 2025, the country’s news agency, Petra, reported.
The growth aligns with the broader trend in the Middle East, with Saudi Arabia forecasting a gross domestic product expansion of 4.6 percent in 2025, and the Central Bank of UAE projecting the Emirates’ economy will increase by 4.5 percent this year and 5.5 percent in 2026.
Reflecting on the state of Jordan’s financial health, Sharkas said: “Our national economy has demonstrated exceptional resilience against challenges and high flexibility, enabling adaptation and limitation of consequences over the past five years, beginning with the coronavirus pandemic and subsequent consecutive external economic shocks.”
He added that Jordan attracted foreign direct investments valued at $1.3 billion during the first three quarters of 2024.
The CBJ governor further said that tourism income also jumped 22 percent in January compared to the same period last year.
Developing the tourism sector is crucial for Jordan, as the country considers this industry pivotal for economic growth and job creation.
Through the Jordan National Tourism Strategy 2021-2025, the country aims to attract international visitors with its archaeological and cultural heritage along with unique natural landscapes.
In a ceremony on March 16, Jordan’s banking sector committed 90 million dinars ($126.92 million) to fund health and education projects over the next three years.
Jafar Hassan, the country’s prime minister, said: “This banking sector that you represent has been a fundamental pillar supporting our national economy’s strength, stability and resilience throughout history.”
He added: “During a quarter century, this great development of our Jordanian banking sector has materialized, achieving advanced global ratings, particularly in financial strength and banking system solidity.”
In March, the World Bank said that it is assessing the financing of five projects aimed at supporting economic reforms, social protection, and entrepreneurship in Jordan, with a total potential investment valued at $900 million.
Oil Updates — prices rise as US vows to keep attacking Houthis
SINGAPORE: Oil prices traded higher on Monday after the US vowed to keep attacking Yemen’s Houthis until the Iran-aligned group ends its assaults on shipping.
Brent futures rose 48 cents, or 0.7 percent, to $71.06 a barrel by 9:54 a.m. Saudi time, while US West Texas Intermediate crude futures rose 47 cents, also 0.7 percent, to $67.65 a barrel.
The US airstrikes, which the Houthi-run health ministry said killed at least 53 people, are the biggest US military operation in the Middle East since President Donald Trump took office in January.
One US official told Reuters the campaign might run for weeks.
Houthi attacks on shipping in the Red Sea have disrupted global commerce and set off a costly campaign by the US military to intercept missiles and drones.
Oil prices rose slightly last week, snapping a three-week losing streak fed by concern over a global economic slowdown driven by escalating trade tension between the US and other nations.
Both benchmarks pared some gains after rising more than 1 percent in early Asian trade as China reported a mixed start to the year. Industrial output slowed in January-February, while retail sales growth accelerated slightly, government data showed on Monday.
The state council, or cabinet, unveiled what it called a “special action plan” on Sunday in a bid to boost domestic consumption and economic recovery amid a burst of US trade tariffs against China, among key trading partners.
That effort has threatened to upset the global trade order.
Analysts at Goldman Sachs cut oil price forecasts, saying they expected the US economy to grow slower than expected, due to the tariffs imposed on countries such as Canada, China and Mexico.
“We reduce by $5 our December 2025 forecast for Brent to $71/bbl (WTI to $67), our Brent range to $65 to $80, and our 2026 average forecast to $68 for Brent (WTI to $64),” the analysts said in a note.
Oil demand was expected to grow at a slower pace than previously expected, while supply from the Organization of Petroleum Exporting Countries and its allies was expected to exceed forecasts, the Goldman analysts said.
US consumer sentiment plunged to a nearly 2-1/2-year low in March and inflation expectations have soared amid worries that Trump’s sweeping tariffs would boost prices and undercut the economy.
US Federal Reserve officials meeting next week are expected to leave the benchmark overnight interest rate in the range of 4.25 percent to 4.50 percent, having reduced it by 100 basis points since September, as they weigh the economic impact of the administration’s policies.
Pakistan sees uptick in economic activity as consumer spending surges in Ramadan
- Consumers flock to markets throughout Ramadan to buy fruits and vegetables in large quantities for evening iftar meals
- Financial analyst says increased remittances, distribution of Zakat among masses in Ramadan also spurs economic activity
KARACHI: Khadeeja Manzoor haggled with a vendor at a busy market in Pakistan’s Karachi over the price of vegetables. The sight is not an unusual one in Pakistan, especially during the holy month of Ramadan, where people flock to fruit and vegetable markets in thousands daily to buy food items.
Muslims break their fast with the evening iftar meal during the holy month of Ramadan, consuming dishes prepared with fruits and vegetables in large amounts. This triggers a surge in consumer spending significantly during the holy month, one that increases sales at grocery stores and marketplaces.
“Our spending increases during Ramadan,” Manzoor, 45, told Arab News. “They (actually) double because though the prices of vegetables have declined a bit, other things have become costlier,” she added.
Pakistan has long grappled with an economic crisis that saw inflation surge to a historic 38 percent in May 2023. However, the government has since then achieved some economic gains, with the country’s monthly inflation rate dropping to 1.5 percent in February on a year-on-year basis.
Dry fruit seller Wasib Abbasi noted that people spent more on items such as Rooh Afza, a sugary drink considered a staple Ramadan diet, and dates during the holy month. This causes a surge in sales during Ramadan, he added.
“Our sales remain normal during the first 15 days of Ramadan but significantly increase during the second half,” Abbasi, who runs a store selling dry fruits at the busy Empress Market, told Arab News.
Financial analyst Muhammad Waqas Ghani agrees the increased demand for food items and the increased inflow of remittances to Pakistan during Ramadan supplements the country’s economic growth. He said Pakistan usually sees a rise of 20 percent in remittances during the holy month every year.
Remittances are a lifeline for Pakistan’s cash-strapped economy, playing a critical role in stabilizing foreign exchange reserves and supporting its balance of payments. Overseas Pakistanis remitted $3.1 billion in February.
“Ramadan does have a significant economic angle. Demand rises in food, lifestyle, and other areas like footwear,” Ghani, the head of research at JS Global Capital Ltd., a commodities brokerage company, told Arab News.
During Ramadan, commercial banks also deduct billions of rupees from people’s accounts on account of the annual Islamic charity, Zakat.
Ghani said the circulation of Zakat funds among the masses also increases their purchasing power, which leads to more consumer spending.
Atiq Mir, chairman of the All Karachi Tajir Ittehad (AKTI), a body of over 400 trade groups in the southern port city, described Ramadan as the “spring month” for traders and citizens alike in terms of both divine blessings and material gains.
“The way people come to bazaars with their children gives a good look,” Mir said, adding that trade “runs above normal” during the holy month.
“Given the size of its population, Karachi alone is a Rs100 billion market if people came out proportionately for Eid shopping only.”
Closing Bell: Saudi stock markets rise; TASI climbs over 1%
RIYADH: Saudi Arabia’s Tadawul All Share Index saw a positive close on Sunday, gaining 127.90 points, or 1.09 percent, to settle at 11,853.78.
The benchmark index recorded a trading turnover of SR4.67 billion ($1.24 billion), with 207 stocks advancing and 35 declining.
Similarly, the Kingdom’s parallel market, Nomu, also posted gains, rising by 139.42 points, or 0.45 percent, to close at 31,275.27. In this market, 50 stocks rose while 30 saw declines. The MSCI Tadawul Index followed suit, gaining 15.52 points, or 1.05 percent, to close at 1,494.79.
Arriyadh Development Co. was the top performer of the day, with its share price soaring by 9.91 percent to SR36.05.
Other notable gainers included Saudi Research and Media Group, whose shares climbed 7.97 percent to SR189.60, and Banan Real Estate Co., which saw a 6.27 percent rise, closing at SR6.95.
On the downside, Saudi Paper Manufacturing Co. experienced the largest drop, falling 3.62 percent to SR58.50. Al-Baha Investment and Development Co. also saw a decline of 2.56 percent, with its shares ending at SR0.38.
Meanwhile, Tihama Advertising and Public Relations Co. saw a 1.84 percent decrease, closing at SR16.
Saudi Reinsurance Co. announced its annual financial results for the year ending Dec. 31.
The company reported a net profit of SR440 million for 2024, a remarkable 628 percent increase compared to 2023. This surge was primarily driven by capital gains from the sale of its stake in Probitas Holding, which amounted to SR365.9 million.
Additionally, the company’s board of directors recommended a 46.6 percent increase in capital by distributing 51.48 million bonus shares to shareholders, translating to four shares for every nine held.
The increase also includes 2.5 million shares allocated for a long-term incentive plan for employees, boosting the company’s capital by an additional 2.16 percent. Despite these strong results, Saudi Reinsurance Co. saw its share price dip by 0.53 percent, closing at SR48.10.
Najran Cement Co. also released its annual financial results for the year ending Dec. 31. The company reported a net profit of SR68.4 million for 2024, reflecting a 24.05 percent increase from 2023. This growth was driven by higher sales and improved gross margins, despite rising general and administrative expenses and finance costs. Najran Cement Co.’s stock rose by 3.34 percent, closing at SR8.75.
