World Bank agrees to give Lebanon $300 million in economic aid

May 26 (UPI) -- The World Bank Group's board of executive directors on Thursday agreed to give $300 million in additional funding to Lebanon as the country continues to suffer from a prolonged economic crisis.

The World Bank said the funding, which will come from its Emergency Crisis and COVID-19 Response Social Safety Net Project, "will expand and extend the provision of cash transfers to poor and vulnerable Lebanese households and further support the development of a unified social safety net delivery system in Lebanon to allow a better response to ongoing and future shocks."

The World Bank had initially given $246 million to the project in January 2021 to assist Lebanon in addressing the impact of the economic crisis and the COVID-19 pandemic on the poor and vulnerable population.

Lebanon continues to struggle to overcome a devastating port explosion in 2020 that killed more than 200 people and injure some 6,000 others.

Before the explosion happened, Lebanon was going through one of its worse economic crises in history, with its GDP contracting 39.9% since 2018, wiping out 15 years of economic growth.

"The crisis continues to have a severe impact on the social level and is significantly impeding access to basic public services," the World Bank said. "With the sharp deterioration in the currency, the three-digit inflation, and rising food insecurity and food inflation rates, the living conditions of extremely poor and vulnerable households continue to deteriorate."

Officials said Lebanon's protection system was highly regressive even before the economic crisis, driven by universal subsidies and limited investments in targeted social safety net programs.