Lebanon Economic Outlook
July 7, 2020
The country is sinking deeper into an economic abyss, as Covid-19 compounds the financial and currency crises. The private-sector PMI languished deep in contractionary territory throughout Q2 amid lower output and new orders. In addition, the Lebanese pound remains in freefall on the black market. This has led to skyrocketing inflation, which hit 56.5% in May, eroding consumers’ purchasing power. Amid surging inflation and unemployment, social unrest reignited over the last month, generating further uncertainty. While the easing of lockdown measures—the country’s only international airport reopened from 1 July—should provide some respite to the battered economy, external support will be vital to restoring economic stability. In this regard, recent developments are discouraging: The IMF suspended talks over a USD 10 billion bailout package in early July due to political infighting on the Lebanese side.Lebanon Economic Growth
Activity is set to plummet this year, due to the fallout from Covid-19, spiraling inflation, social unrest and weak sentiment. A worsening of the viral outbreak, potential further social unrest, and uncertainty over the government’s commitment to reform and ability to secure external funding pose downside risks to the outlook. Our panelists see the economy contracting 13.0% in 2020, which is down 2.2 percentage points from last month’s forecast, before declining 2.2% in 2021.Lebanon Economy Data
| 2015 | 2016 | 2017 | 2018 | 2019 | |
|---|---|---|---|---|---|
| Population (million) | 5.9 | 6.0 | 6.1 | 6.1 | 6.1 |
| GDP per capita (USD) | 8,541 | 8,530 | 8,779 | 9,294 | 8,803 |
| GDP (USD bn) | 50.0 | 51.2 | 53.4 | 56.6 | 53.4 |
| Economic Growth (GDP, annual variation in %) | 0.4 | 1.6 | 0.9 | -1.9 | -5.6 |
| Unemployment Rate | 6.2 | 6.3 | 6.1 | 6.2 | 6.2 |
| Fiscal Balance (% of GDP) | -7.9 | -9.6 | -7.0 | -11.0 | -10.9 |
| Public Debt (% of GDP) | 141 | 146 | 150 | 155 | 171 |
| Inflation Rate (CPI, annual variation in %, eop) | -3.4 | 3.1 | 5.0 | 4.0 | 7.0 |
| Inflation Rate (CPI, annual variation in %) | -3.7 | -0.8 | 4.4 | 6.1 | 2.9 |
| Exchange Rate (vs USD) | 1,508 | 1,508 | 1,510 | 1,512 | 1,509 |
| 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) | 4.0 | 3.9 | 4.0 | 3.8 | - |
| Imports (USD billion) | 17.6 | 17.9 | 18.4 | 18.9 | - |
| Exports (annual variation in %) | -12.5 | -1.2 | 2.5 | -4.8 | - |
| Imports (annual variation in %) | -14.1 | 2.1 | 2.8 | 2.5 | - |
| International Reserves (USD) | 38.8 | 43.3 | 43.5 | 40.6 | 38.2 |
| External Debt (% of GDP) | 135 | 138 | 139 | 140 | - |
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Lebanon Facts
| Value | Change | Date | |
|---|---|---|---|
| Exchange Rate | 1,513 | 0.0 % | Dec 31 |
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Lebanon Economic News
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Lebanon: Lebanon sinks deeper into the economic abyss as IMF talks stall
June 22, 2020
Economic conditions have deteriorated significantly in recent months amid spiraling inflation, the Covid-19 pandemic and sociopolitical instability, after the country defaulted on its debt for the first time ever in March.
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