Líban flag Líban: Panorama econòmic

Panorama econòmic

Economic indicators

After years of neglect, corruption, financial mismanagement and the war next door in Syria, the Lebanese economy entered a full-blown crisis in 2019, sparking mass protests that demanded sweeping reforms. The economic crisis deteriorated further since, due to the COVID-19 pandemic, rising public debt, a sovereign default, a currency collapse and an explosion at the port of Beirut. The traditional engines of growth in Lebanon (real estate, construction and tourism) have stalled and the banking sector, which until then had been praised for its resilience, has collapsed. Between 2022 and early 2023, the economy experienced a temporary stabilization after undergoing significant contraction in previous years, primarily attributed to the contributions of tourism and substantial remittances. According to the World Bank’s projections, the Lebanese economy was expected to see a modest growth of 0.2% in 2023, a positive projection for the first time since 2018, driven by a successful summer tourism season, strong remittances supporting consumption growth, and increasing dollarization of salaries. Signs of ongoing stabilization in private sector activity further contributed to the positive economic outlook. Nevertheless, with the onset of the conflict between Israel and Hamas and its repercussion in Lebanon, the latest estimates projected a recession in 2023 (-0.6% to -0.9%, depending on the extent of the tourism shock).

In 2023, the fiscal and primary deficits narrowed to an estimated 1.3% and 0.3% of GDP, respectively (World Bank). With the successful implementation of planned revenue measures, revenues reached 8.8% of GDP. However, expenditures, driven by increased current spending, transfers to Électricité du Liban, and the continuation of social assistance schemes for public servants, rose to 10.1% of GDP. With a sharp currency depreciation and economic contraction, sovereign debt stood at 179.2% of GDP in 2022 (latest data available), highlighting its unsustainability without comprehensive debt restructuring. However, since the default on sovereign debt on March 9, 2020, minimal advancements have been made in formulating a debt restructuring strategy or reaching an agreement with foreign creditors. Gross foreign currency reserves have increased by USD 425 million between end-July and mid-November 2023, reaching USD 14,213 million (World Bank). The temporary economic stabilization had a ripple effect on the exchange rate, which experienced a temporary steadiness. This stability was influenced by reduced demand for dollars due to widespread dollarization in the economy. In 2023, inflation surged to around 230%, primarily due to the ongoing decline in the overall macroeconomic conditions. This acceleration was predominantly influenced by the depreciation of the exchange rate in the first half of 2023 and the rapid dollarization of economic transactions, especially within the components of the consumer price index basket.

The country faces many humanitarian and social issues in addition to macroeconomic and political challenges. The massive influx of Syrian refugees (25% of the country's population) has shaken the country's demographic balance and labour market, and is putting pressure on the costs of rent, infrastructure and supply of public services such as water and electricity. Unemployment has skyrocketed following the inflow of Syrian refugees, which are competing with Lebanese workers in the informal sector and could hit over a quarter of the workforce. According to the World Bank, more than 60% of the country's young people are not in employment, education or training and over 70% of refugees live under the poverty line. The country faces significant social inequalities: in 2022, the World Bank reclassified Lebanon as a lower-middle-income country, down from an upper-middle-income country. In 2023, the IMF estimated GDP per capita (PPP) at USD 11,794, while according to Human Rights Watch 78% of Lebanon's population was in poverty as of end-2021 - triple the estimated number in 2020.

 
GDP Indicators 20222023 (E)2024 (E)2025 (E)2026 (E)
GDP (billions USD) 21.780.000.000.000.00
GDP (constant prices, annual % change) 0.00.00.00.00.0
GDP per capita (USD) 3,2830000
General government balance (in % of GDP) -5.70.00.00.00.0
General government gross debt (in % of GDP) 283.20.00.00.00.0
Inflation rate (%) n/a0.00.00.00.0
Current Account (billions USD) -6.270.000.000.000.00
Current account (in % of GDP) -28.80.00.00.00.0

Font: IMF – World Economic Outlook Database, 2016

Note: (e) Estimated data

 
Monetary indicators 20162017201820192020
Lebanese Pound (LBP) - Average annual exchange rate for 1 EUR 1,603.721,702.881,778.681,693.824,060.51

Font: World Bank, 2015

 

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Actualitzacions: February 2024

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