Lebanon Economic Outlook
February 11, 2020
The economic panorama remains dismal, as the country grapples with heightened social instability, a dollar crunch and spiking inflation. Economic activity shrank sharply in Q4 according to the Central Bank’s Coincident Indicator, while cement deliveries, construction permits and private-sector credit also declined. The poor performance continued in early 2020, with the private-sector PMI deep in contractionary territory in January. Recent political developments provide a glimmer of optimism however: A new cabinet was finally instated in January with Hassan Diab named as prime minister; Parliament swiftly approved a contractionary 2020 budget; and, in February, the cabinet approved a financial rescue plan. However, panelists are skeptical that the 7% fiscal deficit target in the budget will be met, while the risk of a debt default remains elevated.Lebanon Economic Growth
The economy will likely perform tepidly this year, held back by weak business confidence, tight financial conditions and social instability. Further unrest, huge twin deficits, high public debt and the consequent possibility of a debt default and/or currency devaluation pose downside risks to the outlook. Our panelists see the economy growing 0.2% in 2020, which is down 0.2 percentage points from last month’s forecast, and 1.8% in 2021.Lebanon Economy Data
| 2014 | 2015 | 2016 | 2017 | 2018 | |
|---|---|---|---|---|---|
| Population (million) | 5.6 | 5.9 | 6.0 | 6.1 | 6.1 |
| GDP per capita (USD) | 8,620 | 8,541 | 8,530 | 8,779 | 9,294 |
| GDP (USD bn) | 48.3 | 50.0 | 51.2 | 53.4 | 56.6 |
| Economic Growth (GDP, annual variation in %) | 1.9 | 0.4 | 1.6 | 0.6 | 0.2 |
| Unemployment Rate | 6.3 | 6.2 | 6.3 | 6.1 | 6.2 |
| Fiscal Balance (% of GDP) | -6.4 | -7.9 | -9.6 | -7.0 | -11.0 |
| Public Debt (% of GDP) | 138 | 141 | 146 | 149 | 151 |
| Inflation Rate (CPI, annual variation in %, eop) | -0.7 | -3.4 | 3.1 | 5.0 | 4.0 |
| Inflation Rate (CPI, annual variation in %) | 1.9 | -3.8 | -0.8 | 4.5 | 6.1 |
| Exchange Rate (vs USD) | 1,510 | 1,508 | 1,508 | 1,510 | 1,512 |
| Current Account (% of GDP) | -24.0 | -16.7 | -20.5 | -22.7 | -22.0 |
| Trade Balance (USD billion) | -15.0 | -13.3 | -14.0 | -14.4 | -15.1 |
| Exports (USD billion) | 4.6 | 4.0 | 3.9 | 4.0 | 3.8 |
| Imports (USD billion) | 19.6 | 17.3 | 17.9 | 18.4 | 19.0 |
| Exports (annual variation in %) | -12.1 | -12.5 | -1.2 | 2.5 | -4.8 |
| Imports (annual variation in %) | -4.5 | -11.5 | 3.6 | 2.8 | 3.0 |
| International Reserves (USD) | 39.5 | 38.8 | 43.3 | 43.5 | 40.6 |
| External Debt (% of GDP) | 133 | 135 | 137 | 138 | - |
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Lebanon Facts
| Value | Change | Date | |
|---|---|---|---|
| Exchange Rate | 1,513 | 0.0 % | Dec 31 |
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