Economic Crisis Is Growing In Lebanon!

Economic Crisis Is Growing In Lebanon!

After the tax decision taken in 2019, Lebanon, which drifted into an economic crisis, a new type of coronavirus pandemic, the depreciation of the Lebanese lira and the explosion that occurred on August 4, the economic crisis is gradually growing. The tax decisions taken by the Lebanese government on 17 October 2019 for the first time caused the protests in the country to begin. During the protests that started in Beirut and other provinces, roads were cut, shop windows were smashed and the government was asked to resign. The demonstrations did not stop, although the government abolished communication taxes the same day. Thereupon, on October 18, Lebanese Prime Minister Saad al-Hariri gave government partners 72 hours to resolve the crisis, and a day later, 4 ministers from the Lebanese Forces Party resigned. In the following days, the protests flared up, causing the education sector, public institutions and banks to strike. Prime Minister Hariri submitted his resignation on October 29 due to anti-government demonstrations, while all efforts of the government failed to halt the action. The political and economic turmoil in the country caused the Lebanese lira to depreciate by 85 percent from the beginning of May. Today, according to the official rate, 1 US dollar is traded around 8 thousand lira on the black market, although it is 1500 Lebanese lira. While all the measures taken by the Central Bank failed to stop the depreciation, thousands of Lebanese faced the danger of losing their jobs, and the unemployment rate in the country rose above 35 percent. Made History Between Middle East and North African Countries This unprecedented economic crisis brought price increases with it. According to the data announced by Al-İtimad Bank, there was a 200 percent increase in food and clothing products. On the other hand, this consumer price index increased by 56.6 percent in May and 89.7 percent in June. Studies noted that Lebanon made history as the first country to experience such inflation between the Middle East and North African countries. Coronavirus Effect The coronavirus, which caused an unprecedented crisis all over the world, caused the economic crisis in Lebanon to become stronger. According to the estimates of the Lebanese official authorities, the reflections of Kovid-19 on the economy will cause a contraction of more than 12 percent in the Lebanese Gross Domestic Product (GDP) in 2020. Beirut Explosion On August 4, after the fire that broke out in the warehouse containing explosives in the capital Beirut, a huge explosion took place that shook the entire city. The explosion caused the death of 154 people and nearly 6 thousand people were injured. The Port of Beirut, which was severely damaged by the impact of the explosion, was used as the largest storage area for grains, foodstuffs and medicines in Lebanon.