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
0

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.


Global oil market faces surplus throughout 2019 as demand growth slows

Updated 14 November 2018
0

Global oil market faces surplus throughout 2019 as demand growth slows

  • Output around the world has swelled since the middle of the year
  • The agency raised its forecast for oil output growth from countries outside OPEC

LONDON: Global oil supply will outpace demand throughout 2019, as a relentless rise in output swamps growth in consumption that is at risk from a slowing economy, the International Energy Agency said on Wednesday.
In its monthly report the Paris-based IEA left its forecast for global demand growth for 2018 and 2019 unchanged from last month at 1.3 million barrels per day (bpd) and 1.4 million bpd, respectively, but cut its forecast for non-OECD demand growth, the engine of expansion in world oil consumption.
For the first half of 2019, based on its outlook for non-OPEC production and global demand, and assuming flat OPEC production, the IEA said the implied stock build is 2 million bpd.
Output around the world has swelled since the middle of the year, while an escalating trade dispute between the United States and China threatens global economic growth.
On Wednesday, three sources familiar with the matter told Reuters that OPEC and its partners are discussing a proposal to cut oil output by up to 1.4 million bpd for 2019 to avert an oversupply that would weaken prices.
Since early October, the oil price has fallen by a quarter to below $70 a barrel, its lowest in eight months, which may protect demand to an extent, the IEA said.
“While slower economic growth in some countries reduces the outlook for oil demand, a significant downward revision to our price assumption is supportive,” it added.
The agency raised its forecast for oil output growth from countries outside the Organization of the Petroleum Exporting Countries to 2.4 million bpd this year and 1.9 million bpd next year, versus its previous estimate of 2.2 million bpd and 1.8 million bpd, respectively.
The United States will lead output growth. The IEA estimates total US oil supply will rise by 2.1 million bpd this year and another 1.3 million bpd in 2019, from a current record of more than 11 million bpd.
OPEC crude output rose by 200,000 bpd in October to 32.99 million bpd, up 240,000 bpd on a year ago, as losses of 400,000 bpd from Iran and 600,000 bpd from Venezuela were easily offset by increases from others, such as Saudi Arabia or the United Arab Emirates.
“Next year, there is expected to be even less need for OPEC oil due to relentless growth in non-OPEC supply,” the IEA said, adding that it had cut its forecast for demand for OPEC crude by 300,000 bpd to 31.3 million bpd in 2019.
Inventories of oil in OECD countries rose by 12.1 million barrels in September to 2.875 billion barrels, the IEA said, adding that for the third quarter as a whole, stocks rose 58.1 million barrels, or at a rate of 630,000 bpd, the biggest increase since 2015.