Lebanese central bank to reinstate subsidised housing loans

Beirut

Lebanon’s Central Bank will reinstate subsidised housing loans, ending an almost year-long freeze of the program, the state-run National News Agency reported late on Friday.

The new housing package will be $200 million (Dh734 million) for housing loans of as much as $300 million, the agency said, citing a circular from the Association of Banks in Lebanon after its meeting with the central bank. The central bank also will offer a stimulus package for the production sector valued at $500 million for loans of up to $400 million.

The central bank froze subsidised housing loans at the beginning of last year, eroding a real estate market that was already reeling from slow demand caused by regional tensions and local political stalemate.

Lebanon’s economy has slowed since the crisis in neighbouring Syria began in 2011, leading to a shut down of vital trade routes and an influx of some 1.5 million refugees. The country is also coming to a reckoning with years of fiscal overreach with public debt, estimated at over 160 per cent of gross domestic product this year, is projected to rise to near 180 per cent by 2023, according to the International Monetary Fund.

The central bank has for years carried the burden of stimulating the economy by offering stimulus packages for various sectors given the lack of functioning governments.