Lebanon’s economy could slow down due to Prime Minister resigning

Economics and politics are often linked together and this is now playing out in Lebanon. The recent resignation of that country’s leader has made confidence in the economy fall. With Prime Minister Saad Hariri leaving, big projects to improve raods and electricity supply have been put on hold. Business investor confidence has plunged. 

The political and economic crisis in Lebanon got so bad that four other countries in the region including Saudi Arabia asked their citizens to leave Lebanon. This will no doubt further bruise business confidence in Lebanon. The worries are also building that Saudi Arabia will react by forcing Lebanese workers to leave that country, which will further hurt Lebanon’s economy because it depends on the money that those workers bring back to their families. In fact, these Lebanese workers send back as much as $2 billion a year, which is spent as private consumption on goods and services in Lebanon’s economy.

So all of these slowdown effects could end up having a big negative effect on Lebanon’s GDP growth in future. A further negative effect on growth is a very high government budget deficit that will get worse if businesses and trade slow and tax revenues then fall. All of these developments are a true shame for Lebanon, which has had an economy devastated by wars and other troubles in its past. 

 https://www.cnbc.com/2017/11/11/a-political-shock-throws-lebanons-economy-back-into-crisis.html