Lebanon Economic Forecast

Lebanon Economic Outlook

January 11, 2022

The economy remained in a bad way at the tail end of last year, as reflected by the private-sector PMI, which remained entrenched in contractionary territory through December. Social unrest and acute shortages of basic goods held back activity, while Saudi Arabia’s blanket ban on Lebanese imports in October following a diplomatic spat dealt a further blow. Moreover, the pound continued to sink in the black market, which, together with the progressive withdrawal of government subsidies, spurred hyperinflation and crushed consumers’ purchasing power. A chink of positive news came from the tourism sector: Visitor arrivals were much higher through September in annual terms, lured by the weak currency. In politics, the lack of political unity and a credible reform program continues to delay vital IMF support.

Lebanon Economic Growth

The economy is expected to return to growth this year. However, this will be chiefly due to a favorable base effect following four straight years of recession, and underlying conditions will remain extremely challenging amid high inflation and dysfunctional politics. Social unrest, tensions with the Gulf and the failure to undertake reforms pose downside risks. Our panelists see the economy expanding 2.5% in 2022, which is down 0.1 percentage points from last month’s forecast, and 4.3% in 2023.

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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