Lebanon PM says sweeping reforms still needed despite return to growth

BEIRUT — Lebanon's caretaker Prime Minister Najib Mikati said on Thursday that sweeping reforms remain vital to rescue the stricken economy, despite a return to modest growth this year.

Mikati said the economy had grown by nearly two percent in 2022 after two straight years of severe recession that saw Gross Domestic Product fall by 25.9 per cent in 2020 and by 10.5 per cent in 2021, according to World Bank figures.

He said increased revenues from tourism and a rise in remittances from Lebanese living abroad were factors behind the modest growth.

He said the country was now "at a crossroads, it will either mark the start of the economic revival we have been hoping for, or a dark decline".

Mikati has led a caretaker government since a May general election failed to deliver a majority to either of Lebanon's rival power blocs.

The political deadlock has deepened since end of October, when former president Michel Aoun’s mandate ended without agreement on a successor.

As caretaker leader, Mikati has limited powers and cannot deliver the sweeping reforms demanded by international lenders in exchange for releasing billions of dollars in bailout loans.

“If a new president is elected swiftly and a new government formed that commits itself to real reforms... the country will begin to recover,” Mikati told a business forum.

“If not, God forbid, the economic stagnation will only get worse,” he said.