Description:
This report aims to provide a diagnostic
of the Lebanese economy and policy advice to a broad
audience. To that effect, an analysis of the dynamics of
foreign inflows and of the economy over the past decades is
undertaken. Specifically, this report attempts to provide a
vision for where would Lebanon be in 15 to 20 years if
needed structural reforms are implemented. This report
provides a quantification of the growth impact of these
reforms, taken individually or combined. By doing so, it
gives both an indication on the opportunity costs of not
reforming and provides a vision on what the development
stage could be in Lebanon in 15 to 20 years if reforms are
implemented. The report includes a set of econometric
simulations and analysis aiming: 1) to establish the
relation between the dynamic of foreign financial inflows
and deposits over a period of 20 years, 2) to establish the
relation between deposits as proxy for foreign financial
inflows from one side; and oil price as proxy for regional
wealth, macroeconomic and security stability, and policy
variables from the other side and, 3) to estimate the
relation between economic fluctuations from one side; and
bank lending as one of the channels of transmission of
foreign financial inflows, and debtor interest rate from the
other side.