Economic Overview
For the latest updates on the key economic responses from governments to address the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.
After years of neglect, corruption, financial mismanagement and the war next door in Syria, the Lebanese economy spilled over into 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. According to the latest World Bank data, GDP contracted by 21.4% in 2020, 7% in 2021 and an estimated 5.4% in 2022, when foreign tourism increased by half compared to the previous year but net exports remained negative with imports growing at a faster pace than exports.
Significant tax revenue losses due to the shift towards a cash-based economy that contributed to an uptick in tax evasion and an inflation-driven increase in nominal GDP continued to drive a sharp decrease in revenues as a percentage of GDP, at 5% in 2022 against 7% for expenditure. Overall, the current account deficit was estimated at 14.2% of GDP. The debt-to-GDP ratio rose to 180.7% in 2022, up from 172.5% one year earlier, making Lebanon the third most indebted country in the world, after Japan and Greece (World Bank). Inflation has been surging in recent years: it averaged 186% in 2022, amongst the highest rates globally, on account of the reduced share of goods imported at Bank of Lebanon subsidized exchange rates and increased dollarization in the country’s economy. In the same year, net remittances accounted for 17.2% of GDP. Monetary and financial turmoil continues to drive crisis conditions: the interactions between the exchange rate, narrow money, and inflation continue to shape unstable macroeconomic dynamics. As pointed out by the IMF, Lebanon needs assistance to overcome its deep humanitarian, social, and economic crisis and to implement reforms to bring public finances into order, restructure public debt, rehabilitate the banking system, expand the social safety net, reform state-owned enterprises, and improve governance. On April 7, 2022, the Government of Lebanon and the IMF announced a staff-level agreement on a USD 3 billion, 46 months Extended Fund Arrangement (EFF), although securing IMF Board approval for the EFF will require the completion of ten prior preliminary agreements.
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, 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 July 2022, the World Bank reclassified Lebanon as a lower-middle-income country, down from an upper-middle-income country. In the same year, the IMF estimated GDP per capita (PPP) at USD 11,377, while according to Human Rights Watch 78% of Lebanon's population was in poverty as of end-2021 - triple the estimated number in 2020.
| Main Indicators | 2020 | 2021 | 2022 (E) | 2023 (E) | 2024 (E) |
| GDP (billions USD) | 24.49 | 0.00 | 0.00 | 0.00 | 0.00 |
| GDP (Constant Prices, Annual % Change) | -25.9 | 0.0 | 0.0 | 0.0 | 0.0 |
| GDP per Capita (USD) | 3,589 | 0 | 0 | 0 | 0 |
| General Government Balance (in % of GDP) | -5.3 | 0.0 | 0.0 | 0.0 | 0.0 |
| General Government Gross Debt (in % of GDP) | 150.6 | 0.0 | 0.0 | 0.0 | 0.0 |
| Inflation Rate (%) | 84.9 | 0.0 | 0.0 | 0.0 | 0.0 |
| Current Account (billions USD) | -3.70 | 0.00 | 0.00 | 0.00 | 0.00 |
| Current Account (in % of GDP) | -15.1 | 0.0 | 0.0 | 0.0 | 0.0 |
Source: IMF – World Economic Outlook Database , October 2021
Country Risk
See the country risk analysis provided by La Coface.
