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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 202020212022 (E)2023 (E)2024 (E)
GDP (billions USD) 24.490.000.000.000.00
GDP (Constant Prices, Annual % Change) -25.90.00.00.00.0
GDP per Capita (USD) 3,5890000
General Government Balance (in % of GDP) -5.30.00.00.00.0
General Government Gross Debt (in % of GDP) 150.60.00.00.00.0
Inflation Rate (%) 84.90.00.00.00.0
Current Account (billions USD) -3.700.000.000.000.00
Current Account (in % of GDP) -15.10.00.00.00.0

Source: IMF – World Economic Outlook Database , October 2021

Country Risk

See the country risk analysis provided by La Coface.

 

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Main Sectors of Industry

Lebanon has fertile lands and benefits from a moderate climate and abundant water resources. However, the agricultural sector is underdeveloped, and only contributes 1.4% of the GDP and 11% of employment (World Bank, latest data available). Key agricultural products include fruits (mainly apples, oranges, bananas and grapes, but also significantly olives) which account for around 30% of total agricultural production, and vegetables (such as potatoes, tomatoes and maize) which account for more than 60% of total production; whereas coffee is the main export product. Just 11% of Lebanon’s population lives in rural areas, but more than one-fifth of households in the agricultural sector are classified as very poor (IFAD). According to the latest figures from the Lebanese Center for Research and Agricultural Studies, the total value of Lebanon’s agricultural production in 2021 stood at about USD 1.3 billion, compared to USD 1.4 billion the year before, and down from more than USD 1.9 billion recorded before the pandemic.

Industry, which accounted for 12.8% of GDP in 2019, dropped to 6.9% of GDP in 2020 due to the COVID-related crisis and stood at just 2.8% in 2021, one of the lowest ratios in the world. It employs 24% of the workforce (data World Bank) and is dominated by the manufacturing of agricultural products, metals, minerals, furniture and other manufactured goods. Before the crisis, there were over 4,700 industrial firms in Lebanon, mainly in the manufacturing of agri-food products, followed by construction materials and chemical products.

Services are the dominant sector of the Lebanese economy, representing 94.1% of the country's GDP and employing 65% of the workforce. The banking sector was traditionally the mainstay of the economy, but it is going through a major crisis. Banking activity, even when it was sustained and lucrative, did not constitute real support for the private sector since most of the liquidity coming from banks is used to finance public debt. Tourism accounts for almost 20% of GDP and employs around 18% of the active population. The sector currently suffers from the serious economic and political crisis that the country is going through, although it showed signs of recovery in the first half of 2022 when the number of tourists doubled compared to the same period one year earlier.

 
Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 11.3 23.6 65.1
Value Added (in % of GDP) 1.4 2.8 94.1
Value Added (Annual % Change) -7.1 -6.9 -3.9

Source: World Bank - Latest available data.

 
Monetary Indicators 20162017201820192020
Lebanese Pound (LBP) - Average Annual Exchange Rate For 1 USD 1,507.501,507.501,507.501,507.503,555.00

Source: World Bank - Latest available data.

 

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Foreign Trade

The share of Lebanon’s foreign trade has been declining sharply in recent years and stood at nearly 79% of GDP in 2021, up from 50% one year earlier mostly due to the contraction in GDP (data World Bank). Lebanon mainly exports minerals (gold), diamonds, furniture, grapes, motor cars and ferrous waste and scrap. The country mainly imports mineral fuels (more than one-fourth of total imports), motor cars, gold, medicaments, and diamonds (data Comtrade 2021).

Lebanon’s main export partners are the United Arab Emirates, Switzerland, Cameroun, Qatar, Egypt, and the U.S.; whereas imports come chiefly from the EU (mainly Greece, Italy, Germany and France), Turkey, China, the U.S., and the United Arab Emirates (Comtrade).
The war in Syria, the drop in demand from countries in the region and the economic and political crisis in Lebanon are having a negative impact on Lebanese exports, while imports are also hindered by the lack of hard currency. The country's trade balance is structurally in deficit, a trend that should worsen in the upcoming future.
 
According to WTO data, in 2021 Lebanese merchandise exports stood at USD 4.5 billion as opposed to USD 13.8 billion in imports. No data is available for the trade in services; however, for the same year, the World Bank estimated the overall trade deficit to account for 26.8% of Lebanon’s GDP. According to preliminary data by the Bank of Lebanon, in the first half of 2022 exports of goods totalled USD 2.3 billion against USD 8.5 billion in imports; concerning trade in services, exports reached USD 3.6 billion vis-à-vis USD 2.7 billion in imports.

 
Foreign Trade Values 20172018201920202021
Imports of Goods (million USD) 19,91120,39619,64111,35513,857
Exports of Goods (million USD) 4,0263,8304,8294,0854,590
Imports of Services (million USD) 13,81514,24313,3365,7340
Exports of Services (million USD) 15,13615,55113,5824,9850

Source: World Trade Organisation (WTO) ; Latest available data

Foreign Trade Indicators 20172018201920202021
Foreign Trade (in % of GDP) 68.568.362.650.178.8
Trade Balance (million USD) -14,459-14,912-13,454-6,584-8,343
Trade Balance (Including Service) (million USD) -13,130-13,621-12,938-6,432-7,236
Imports of Goods and Services (Annual % Change) 2.11.3-9.5-46.0-12.2
Exports of Goods and Services (Annual % Change) 3.9-4.7-0.9-53.713.1
Imports of Goods and Services (in % of GDP) 46.547.542.033.852.8
Exports of Goods and Services (in % of GDP) 21.920.820.616.426.0

Source: World Bank ; Latest available data

Foreign Trade Forecasts 20222023 (e)2024 (e)2025 (e)2026 (e)
Volume of exports of goods and services (Annual % change) 0.00.00.00.00.0
Volume of imports of goods and services (Annual % change) 0.00.00.00.00.0

Source: IMF, World Economic Outlook ; Latest available data

Note: (e) Estimated Data

 
International Economic Cooperation
Lebanon is a member of the following international economic organisations: IMF, Arab Fund for Economic and Development (AFESD), ICC, Arab Monetary Fund (AMF), G-24, G-77, Arab League, WTO, among others. For the full list of economic and other international organisations in which participates Lebanon click here. International organisation membership of Lebanon is also outlined here.
Free Trade Agreements
The up-to-date list of Free Trade Agreements signed by Lebanon can be consulted here.
 

Main Partner Countries

Main Customers
(% of Exports)
2021
United Arab Emirates 24.3%
Switzerland 10.1%
Cameroon 6.7%
Qatar 4.8%
Egypt 4.1%
See More Countries 49.9%
Main Suppliers
(% of Imports)
2021
Türkiye 11.0%
Greece 9.9%
China 9.2%
United States 5.6%
United Arab Emirates 5.5%
See More Countries 58.9%

Source: Comtrade, Latest Available Data

 

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Political Outline

Current Political Leaders
President: Michel Awn (since 31 October 2016)
Prime Minister: Najib Mikati (since 10 September 2021)
Next Election Dates
Presidential: 2023
National Assembly: May 2026
Current Political Context
Lebanon is characterised by a high level of political instability, aggravated by a severe economic crisis. The political system aims at preserving the balance between the main religious groups. Parliamentary elections took place in May 2022, whose results produced a hung parliament with fragmented blocs and seats, with non-party affiliates earning a significant number of seats. The Lebanese Forces (Christian) and the protest opposition also gained seats, whereas Hizbullah’s allies lost some. Prime Minister Mikati, whose government went into caretaker mode upon parliamentary elections, was re-appointed as prime minister-designate in June 2022, with a new government yet to be formed. Moreover, President Aoun’s term ended on October 30th, leaving a void as the parliament has so far been unable to agree on his successor (as of January 2023, the Lebanese Parliament failed to elect a new president for the 11th time), resulting in an unprecedented institutional vacuum amid a dramatic economic and political situation.
Meanwhile, in October 2022, Lebanon and Israel – with the intermediation of the United States - reached a historic agreement to delimit their maritime borders. The agreement will likely bring relative stability on the security front and may allow Lebanon to begin the process of gas exploration.
Main Political Parties
Political forces are assigned by a fixed number of seats according to their religious denomination. They group to form electoral alliances, but such coalitions are weakly connected in practice. The main parties represented in the parliament are:

- Free Patriotic Movement: right-wing, christian democracy, civic nationalism
- Development and Liberation Bloc: coalition formed by the Amal Movement and the Arab Socialist Ba'ath Party
- Hezbollah: Shia Islamist political party and militant group
- Progressive Socialist Party: centre/centre-left, its confessional base is in the Druze sect
- Lebanese Forces: Christian-based and former militia during the Lebanese civil war, right-wing.

Executive Power
The President is the head of the state and is elected by the National Assembly for a six-year term. The Prime Minister is appointed by the President in consultation with the National Assembly and acts as the head of the government, to serve a four-year term. Though the Prime Minister enjoys the executive powers which include implementation of the law in the country and running the day-to-day affairs, the President also holds a strong and influential position which includes the promulgation of laws passed by parliament and ratification of treaties. The Cabinet is chosen by the Prime Minister in consultation with the President and members of the National Assembly. As per the constitution of the country, the President must be a Maronite Catholic Christian and the Prime Minister a Sunni Muslim.
Legislative Power
The legislature in Lebanon is unicameral. The parliament called National Assembly consists of 128 seats; with its members elected by popular vote on the basis of proportional representation, with quotas according to religion,  to serve four-year terms. Legislative power is vested in both the government and the parliament. The executive branch of the government is directly or indirectly dependent on the support of the parliament, often expressed through a vote of confidence. The Prime Minister cannot dissolve the parliament nor can he veto its enactments. The Speaker of the Parliament must be a Shiite Muslim.
 

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COVID-19 Country Response

COVID-19 epidemic evolution

To find out about the latest status of the COVID-19 pandemic evolution and the most up-to-date statistics on the COVID-19 disease in Lebanon, consult the dedicated page on the website of the Ministry of Public Health. The portal also includes data on the geographical distribution of the epidemic in the country.
For the international outlook you can consult the latest
situation reports published by the World Health Organisation as well as the global daily statistics on the coronavirus pandemic evolution including data on confirmed cases and deaths by country.

Sanitary measures

To find out about the latest public health situation in Lebanon and the current sanitary measures in vigour, please consult the dedicated pages on the website of the Ministry of Public Health.
The Lebanese COVID-19 National Health Strategic Preparedness and Response Plan can be consulted here.

Travel restrictions

The COVID-19 situation, including the spread of new variants, evolves rapidly and differs from country to country. All travelers need to pay close attention to the conditions at their destination before traveling. Regularly updated information for all countries with regards to Covid-19 related travel restrictions in place including entry regulations, flight bans, test requirements and quarantine is available on TravelDoc Infopage.
It is also highly recommended to consult COVID-19 Travel Regulations Map provided and updated on the daily basis by IATA.
The US government website of Centers of Disease Control and Prevention provides COVID-19 Travel Recommendations by Destination.
The UK Foreign travel advice also provides travelling abroad advice for all countries, including the latest information on coronavirus, safety and security, entry requirements and travel warnings.

Import & export restrictions

For information on the trade restrictions adopted by the Lebanese government, consult the section dedicated to Lebanon on the International Trade Centre's COVID-19 Temporary Trade Measures webpage.

Economic recovery plan

For the general overview of the key economic policy responses to the COVID-19 outbreak (fiscal, monetary and macroeconomic) taken by the Lebanese government to limit the socio-economic impact of the COVID-19 pandemic, please consult the section dedicated to Lebanon in the IMF’s Policy Tracker platform.

Support plan for businesses

For the information on the local business support scheme established by the Lebanese government, consult the website of the Ministry of Economy and Trade, as well as the dedicated page from KPMG.

For a general overview of international SME support policy responses to the COVID-19 outbreak refer to the OECD's SME Covid-19 Policy Responses document.
You can also consult the World Bank's Map of SME-Support Measures in Response to COVID-19.

Support plan for exporters

For the up-to-date information on possible support plans for exporters in Lebanon, if applicable, please consult the website of the Investment Development Authority of Lebanon (IDAL).

 

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