In a report released on Tuesday, the World Bank said that “the economic and financial crisis is likely to rank in the top 10, possibly top 3, most severe crisis episodes globally since the mid-nineteenth century.”
Entitled “Lebanon Sinking: To the Top 3,” the World Bank report revealed that the Lebanese economy will contract by nearly 10% in 2021 with “no clear turning point in the horizon.”
From being one of the most prosperous countries in the region, Lebanon defaulted on its debt last year and its currency lost around 85% of its value, leading to a fall in the purchasing power. According to the monetary institution’s report, this kind of sudden economic collapse is usually caused by war.
As a result of corruption and mismanagement by the country’s political elite, this economic collapse has caused the economy to decrease by 6.7% in 2019 and 20.3% in 2020, leading more than half of the Lebanese to the poverty line.
The International Monetary Fund (IMF) is waiting for the formation of a new government in order to release aid to Lebanon, aid conditional on economic and financial reforms.