BEIRUT: The World Bank has warned that if Lebanon does not embrace fundamental reform, it will face significant issues in functioning its governmental institutions and maintaining social peace.

"Despite early warnings, Lebanon has wasted valuable time and missed several opportunities to restructure its economic and financial system," World Bank Mashreq Regional Director Saroj Kumar Jha was quoted as saying in a statement citing media report.

"The penalty of inactivity is huge, not just on individuals' everyday life, but also on the Lebanese people's future," Jha added. Because of the country's protracted crises, failing fundamental public services, rising unemployment, and severely depleted human resources have formed "long-lasting scars" on the Lebanese economy and society, the statement said.

"Real GDP is anticipated to shrink by 6.5 percent in 2022 if no policy reforms are implemented." The World Bank's announcement came less than a week after the Lebanese pound hit a new historic low on the parallel market as the country's extraordinary financial crisis continued.

On May 24, the Lebanese pound fell to 34,000 liras to the US dollar, down from a record low of 30,000 liras less than a week ago. Lebanon has been in the midst of an extraordinary financial crisis in recent years, owing to a lack of US dollars brought on by political unrest and a worsening economy.

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