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"The Lebanese economy is facing increasing deflationary pressures, which prevent any GDP growth until this time of the year," said Ali Hashim in the newspaper Al Akhbar, titled "Reluctance banks to lend strengthens deflation. " June 2009. The pressures are mainly concentrated on fiscal policies aimed at austerity of investment expenditure and, secondly, on the monetary policies that the Bank of Lebanon has resorted to during the last period and rested on on reducing the liquidity and the money supply of the markets. Ijj M banks for lending will be one of the factors that promote this slowdown, given the role of these advances in the creation of the money supply and the financing of the trade and household consumption.
Loans are one of the most important mechanisms for the creation of a money supply, by reinjecting money from deposits on the markets. Hence any reduction in the lending capacity of banks to a block of money supply in the markets, which is linked to a large volume of consumption and therefore to economic growth. In the current economic crisis, the recession on the markets is accompanied by a reduction in the money supply, which is largely related to the reluctance of banks to provide loans. "
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