Lebanon Economic Forecast

Lebanon Economic Outlook

September 7, 2021

Economic conditions remain grim. While PMI readings have risen since the early part of the year, aided by recovering activity abroad, an uptick in tourism and reduced Covid-19 restrictions, they still point to deteriorating private-sector activity. The economy continues to be held hostage to ongoing protests, sky-high inflation, institutional paralysis and acute shortages of fuel and other basic goods. Making matters worse, in August the government raised fuel prices by 66% as it partially reduced subsidies, which will further fan inflation ahead. Moreover, PM-designate Najib Mikati has yet to form a government, meaning the country has remained without a fully functioning administration for over a year. More positively, Lebanon should soon receive USD 860 million in IMF reserves, although more comprehensive international support remains conditional on the formation of a new government.

Lebanon Economic Growth

GDP is seen sinking further this year due to the fallout from the deepening financial, currency and debt crises. A resurgence in Covid-19 cases, potential further social unrest, an extension of the current political impasse and severe doubts over the authorities’ commitment to reform and ability to secure external funding pose downside risks. Our panelists see the economy contracting 7.1% in 2021, which is down 1.3 percentage points from last month’s forecast. Panelists see the economy expanding 3.2% in 2022.

Lebanon Economy Data

2015 2016 2017 2018 2019
Population (million)5.96.06.16.16.1
GDP per capita (USD)8,5418,5308,7799,2948,803
GDP (USD bn)50.051.253.456.653.4
Economic Growth (GDP, annual variation in %)0.41.60.9-1.9-5.6
Unemployment Rate6.26.36.16.26.2
Fiscal Balance (% of GDP)-7.9-9.6-7.0-11.0-10.9
Public Debt (% of GDP)141146150155171
Inflation Rate (CPI, annual variation in %, eop)-3.43.15.04.07.0
Inflation Rate (CPI, annual variation in %)-3.7-0.84.46.12.9
Exchange Rate (vs USD)1,5081,5081,5101,5121,509
Current Account (% of GDP)-17.1-20.4-22.7-23.6-  
Trade Balance (USD billion)-13.6-14.0-14.4-15.1-  
Exports (USD billion)4.03.94.03.8-  
Imports (USD billion)17.617.918.418.9-  
Exports (annual variation in %)-12.5-1.22.5-4.8-  
Imports (annual variation in %)-14.12.12.82.5-  
International Reserves (USD)38.843.343.540.638.2
External Debt (% of GDP)135138139140-  

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Lebanon Facts

Value Change Date
Exchange Rate1,5130.0 %Dec 31

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