BEIRUT: Prime Minister Najib Mikati admitted Friday that there was a need to restore confidence in Lebanon’s economy but said growth was still positive.
“It is obvious that we need to find new incentives to restore confidence in our economy and on top of these incentives should be stability at the social and political levels and that is what you are doing today through this conference,” Mikati said during a speech at the opening the Annual Arab Banking Conference in Beirut.
The two-day event was organized by the Arab Banking Union under the title of “Economic stability at A time of uncertainty.”
Mikati highlighted his Cabinet’s economic record with regard to the country’s banking sector and also touted Lebanon’s resilience in the face of regional and international crises, saying the economy had maintained positive growth, which according to government estimates stood at 5.2 percent in 2011.
The prime minister also praised the performance of the banking sector in the face of a recent report by Moody's Investors Service which kept the outlook for Lebanon’s banking system as negative.
Moody's report, which was released in October, also said that the main drivers of the outlook are expected weak economic growth and business sentiments in both 2012 and 2013 due to regional tensions.
With the deteriorating situation in neighboring Syria, Lebanon has faced several economic challenges including a slowdown in investment and weak growth rates.
“Despite the current regional situation, Lebanon's baking sector has remained immune in terms of attracting deposits; total deposits in Lebanese commercial banks have increased by 7 percent annually, which is equivalent to three times the GDP,” Mikati said.
He also said that loans to the private sector rose by 10 percent, making the size of the loans equivalent to the GDP, while the banking sector had grown in the past year and its size was three times the size of the Lebanese economy.
The prime minister, who is facing pressure from the opposition to step down, also highlighted some 80 projects his Cabinet had forwarded to Parliament aimed at improving the economic situation.
“Our government has worked on several economic projects including draft laws governing financial markets, initiatives for job opportunities for the youth, anti-money laundering laws,” he said.
Mikati said his Cabinet was working on eliminating obstacles in the tourism and export sectors by “improving the economic environments and activating the work of public institutions to encourage investment.”
The prime minster also urged political leaders to refrain from using the economic situation for political gains.
“We should not use the economy for the sake of political gains but prioritize economic issues so that politics can be used as a means to secure achievements,” he said
"I address all politicians in the majority and opposition and say: ‘We are not going to escape the reality and live in an illusion of stability but we refuse to surrender in the face of a problem or crisis, regardless of its magnitude,’” Mikati added.