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World Bank: Lebanon is going through worst financial crisis in its history

worst financial crisis

Beirut, (Business News Report)|| The World Bank confirmed that Lebanon is going through the worst financial crisis in its history, noting that it is among the three worst crises in the world.

The Director of the Middle East Department at the World Bank, Saroj Kumar Jha, called for the need to achieve stability at the macroeconomic level.

Kumar’s speech came during his participation in the “Lebanon Reform Recovery and Reconstruction Framework” meeting, chaired by Prime Minister Najib Mikati, and in joint coordination between the United Nations, the European Union and the World Bank in Beirut.

The World Bank official said that “Lebanon has witnessed many crises, but this crisis is the worst… Indeed, Lebanon’s crisis is among the three worst crises in the world.”

For two years, Lebanon has been suffering from the worst economic crisis, which led to a financial collapse, as well as great material losses to the banking system, estimated by the government at about $69 billion.

He stated that the economic situation is dire, “the size of the economic contraction has reached 60 percent until 2021.”

However, he expressed his optimism “with the national reform program led by Mikati, but if this program does not reach well, it will constitute an even greater contraction of the economy and will lead to a crisis in economic and social conditions.”

He believed that “there is a need for a reform plan that includes a financial program, debt repayment, restructuring the financial and banking sector, and developing social protection systems.”

For his part, Mikati said, “The government is working through the relevant authorities in the public sector to unify the single and comprehensive vision for development, recovery and reform among those concerned, and we are close to completing the unification of this vision to implement the necessary reforms.”

In a related context, Lebanon officially announced the bankruptcy of the state and the Central Bank of Lebanon, at a time when Lebanon is suffering from living and banking crises and a major economic decline.

In turn, His Excellency Al-Shami, Deputy Prime Minister of the Lebanese Government, said: “The state and the central bank are bankrupt, and the losses of the state, the Banque du Liban, banks and depositors will be distributed.”

He explained that there is no specific percentage for distributing losses, adding: “Unfortunately, the state is bankrupt, as is the Banque du Liban, and we want to come up with a result, and the loss occurred due to policies for decades, and if we did nothing, the loss would be much greater.”

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