Lebanon needs political action to avoid economic collapse -finance minister

Finance Minister Ali Hassan Khalil made the remarks following a meeting with the government’s economic and social council. (Reuters)
Updated 12 September 2018
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Lebanon needs political action to avoid economic collapse -finance minister

BEIRUT: Politicians in Lebanon, still lacking a government four months after national elections, need to take action to stop the country’s economic crisis becoming an economic collapse, its finance minister said on Wednesday.
Infighting has hampered efforts by Prime Minister-designate Saad Al-Hariri to form a national unity administration, leaving a political vacuum that has increased concerns for the highly-indebted economy.
“We are not concealing this crisis, but will this crisis inevitably lead us to a collapse? ... I say that with strong political commitment, political will and cooperation between all sectors we can avoid it,” caretaker Finance Minister Ali Hassan Khalil said.
His comments, which followed a meeting with the government’s economic and social council, were televised. Asked by Reuters what he meant by collapse, he replied “the economic situation.”
Leaders from across the political spectrum agree a government urgently needs to be formed, but a deal remains elusive.
Its formation would be likely to help raise investor confidence in the country, unlock billions of dollars in donor funding and enable parliament to embark on long-overdue reforms.
In April, international donors meeting in Paris pledged more than $11 billion of investment, but they want evidence of economic reforms first. At that meeting Hariri promised to reduce the budget deficit as a percentage of GDP by 5 percent over five years.
Lebanon had the world’s third highest debt-to-GDP ratio, at over 150 percent, at the end of 2017. The International Monetary Fund wants to see immediate and substantial fiscal adjustment to improve debt sustainability.
On Wednesday, parliamentary speaker Nabih Berri said Lebanon did not have the luxury of time when it came to forming a government “especially when it comes to the economic situation.”
Central Bank Governor Riad Salameh has said the Lebanese pound, which is pegged to the dollar, will remain stable and that the central bank has high foreign reserves.
He reiterated those comments to broadcaster CNBC on Tuesday.
Lebanon’s foreign assets excluding gold were $43.56 billion at the end of August, according to central bank data.


‘Get prices down’ Trump tells OPEC

Updated 20 September 2018
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‘Get prices down’ Trump tells OPEC

  • Trump highlights US security role in region
  • Comments come ahead of oil producers meeting in Algeria

LONDON: US president Donald Trump urged OPEC to lower crude prices on Thursday while reminding Mideast oil exporters of US security support.
He made his remarks on Twitter ahead of a keenly awaited meeting of OPEC countries and its allies in Algiers this weekend as pressure mounts on them to prevent a spike in prices caused by the reimposition of oil sanctions on Iran.
“We protect the countries of the Middle East, they would not be safe for very long without us, and yet they continue to push for higher and higher oil prices!” he tweeted.
“We will remember. The OPEC monopoly must get prices down now!”
Despite the threat, the group and its allies are unlikely to agree to an official increase in output, Reuters reported on Thursday, citing OPEC sources.
In June they agreed to increase production by about one million barrels per day (bpd). That decision was was spurred by a recovery in oil prices, in part caused by OPEC and its partners agreeing to lower production since 2017.
Known as OPEC+, the group of oil producers which includes Russia are due to meet on Sunday in Algiers to look at how to allocate the additional one million bpd within its quote a framework.
OPEC sources told Reuters that there was no immediate plan for any official action as such a move would require OPEC to hold what it calls an extraordinary meeting, which is not on the table.
Oil prices slipped after Trumps remarks, with Brent crude shedding 40 cents to $79 a barrel in early afternoon trade in London while US light crude was unchanged at about $71.12.
Brent had been trading at around $80 on expectations that global supplies would come under pressure from the introduction of US sanctions on Iranian crude exports on Nov. 4.
Some countries has already started to halt imports from Tehran ahead of that deadline, leading analysts to speculate about how much spare capacity there is in the Middle East to compensate for the loss of Iranian exports as well as how much of that spare capacity can be easily brought online after years of under-investment in the industry.
Analysts expect oil to trend higher and through the $80 barrier as the deadline for US sanctions approaches.
“Brent is definitely fighting the $80 line, wanting to break above,” said SEB Markets chief commodities analyst Bjarne Schieldrop, Reuters reported. “But this is likely going to break very soon.”