Special country risk survey: Lebanon on the ropes after Beirut explosion
Euromoney asked its panellists to rescore Lebanon’s risks in the aftermath of the port tragedy on August 4, with investors left pondering what’s next for a country now desperately in need of aid and finance for reconstruction.
The destroyed port in Beirut
The impromptu special survey shows Lebanon’s total risk score downgraded further to less than 22 points out of a maximum 100, pushing the country deeper into the lowest of the five tiers containing the world’s worst default risks, to 164th out of 174 countries.
That puts it on a par with Yemen, Venezuela and Sudan in the global risk rankings:
Lebanon’s fall from grace is nothing short of dramatic for a country with such huge potential in a region where failed states are now becoming only too commonplace.
The risk score has fallen by more than 13 points in the survey this year and more than 22 during the past decade, highlighting the country’s long-term decline.
Before the explosions, or even the true extent of the Covid-19 shock was known, the IMF was predicting GDP would decline in real terms by 12% this year, marking a third and even worse year of contraction, with inflation shooting up to 17% and the fiscal deficit widening to 15% of GDP.
Covid-19 cases are expected to increase in the country in the coming weeks, driven by the massive interactions between the injured from the blast and doctors and nurses - Rafah Toubia Farah
Those indicators could now be much worse.