Publication: Lebanon Economic Monitor - Spring
2023: The Normalization
of Crisis Is No
Road for
Stabilization
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Date
2023-05-15
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2023-05-15
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The systemic failure of Lebanon’s banking system and the collapse of the currency have resulted in a large, dollarized cash-based economy, worth an estimated US$9.86 billion or 45.7 percent of GDP in 2022 (Special Focus: Gauging the Size of the Cash Economy in Lebanon). A pervasive and growing dollarized cash economy is a major impediment to Lebanon’s economic recovery. It not only threatens to compromise the effectiveness of fiscal and monetary policy, but also heightens the risk of money laundering, increases informality, and prompts further tax evasion. Moreover, the increasing reliance on cash transactions also threatens to completely reverse the progress that Lebanon made pre-crisis towards enhancing its financial integrity by instituting robust anti-money laundering mechanisms in its commercial banking sector.
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“World Bank. 2023. Lebanon Economic Monitor - Spring
2023: The Normalization
of Crisis Is No
Road for
Stabilization
. © World Bank. http://hdl.handle.net/10986/40027 License: CC BY-NC 3.0 IGO.”
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Publication Lebanon Economic Monitor, Spring 2023(Washington, DC, 2023-05-15)The systemic failure of Lebanon’s banking system and the collapse of the currency have resulted in a large, dollarized cash-based economy, worth an estimated US$9.86 billion or 45.7 percent of GDP in 2022 (Special Focus: Gauging the Size of the Cash Economy in Lebanon). A pervasive and growing dollarized cash economy is a major impediment to Lebanon’s economic recovery. It not only threatens to compromise the effectiveness of fiscal and monetary policy, but also heightens the risk of money laundering, increases informality, and prompts further tax evasion. Moreover, the increasing reliance on cash transactions also threatens to completely reverse the progress that Lebanon made pre-crisis towards enhancing its financial integrity by instituting robust anti-money laundering mechanisms in its commercial banking sector.Publication Lebanon Economic Monitor, Spring 2017(World Bank, Washington, DC, 2017-04)The election of President Michel Aoun in October 2016 after almost two and a half years of a presidential vacancy, and the subsequent formation of a national unity government have generated hope for the resuscitation of the political process in Lebanon. Nonetheless, the protracted Syrian conflict is markedly worsening the country's vulnerabilities and remains an impediment to the return to potential growth. For the fifth year, Lebanon persists as the largest host (on a per capita basis) for displaced Syrians. In 2016, real GDP growth underwent a slight acceleration to reach an estimated 1.8 percent, compared to 1.3 percent in 2015. This was driven by an improvement in the real estate sector, marking a low threshold-effect from a weak performance in 2015 – cement deliveries expanded by 4.4 percent in 2016 compared to a contraction of 8.6 percent in 2015. Real GDP growth was also boosted by tourist arrivals, an indicator that registered an 11.2 percent growth in 2016. Nonetheless, economic activity persists below potential, inhibited by geopolitical and security conditions, which remain decidedly volatile.Publication Lebanon Economic Monitor, Spring 2014(Washington, DC, 2014-04)Lebanon faces serious challenges from a volatile security environment and spillovers from the ongoing Syrian conflict which pose serious risks to an already fragile internal political situation. Security incidents have become increasingly more common and the volatile security environment is weakening consumer and investor sentiments and adversely affecting tourism, a central contributor to economic growth and employment in Lebanon. The influx of Syrian refugees to Lebanon persists, with officially registered refugees reaching close to 1 million (i.e., 21.6 percent of Lebanon’s pre-conflict population), which poses significant fiscal, health and educational challenges.Publication Lebanon Economic Monitor, Spring 2015(Washington, DC, 2015-04-20)The Lebanon Economic Monitor provides an update on key economic developments and policies over the past six months. It also presents findings from recent World Bank work on Lebanon. It places them in a longer-term and global context, and assesses the implications of these developments and other changes in policy on the outlook for Lebanon. Lebanon continues to be impacted by the domestic political stalemate and regional turmoil, particularly along its border with Syria. Economic activity picked up in the second half of 2014. Stronger economic performance and lower oil prices pushed real GDP growth to an estimated 2.0 percent in 2014, compared to 0.9 percent in 2013. One-off cosmetic and unsustainable measures rather than policy actions helped improve the fiscal balance in 2014. We estimate the overall fiscal deficit to have declined by 2.3 percentage points. Declining imports lead an improvement in the current account balance. In 2014, a fall in merchandize imports induced a 4.4 pp reduction in the current account deficit to a still-elevated 22.2 percent of GDP. This trend is projected to continue in 2015 helped by falling oil prices and a depreciating euro, Headline inflation plummeted from 2.7 percent in 2013 to 1.9 percent in 2014 and is expected to remain tempered over the medium term. Lebanon s economy continues to be exposed to external shocks. The border with Syria is increasingly menacing as coordinated attacks by ISIS and Al Nusra are being launched more frequently from their bases in Syria. Inefficiencies in power generation impose sizable macroeconomic costs on Lebanon. The Lebanese electricity sector has been underperforming for decades with considerable socio-economic costs. The macroeconomic impact has been massive.Publication Lebanon Economic Monitor, Spring 2013(Washington, DC, 2013-04)The Lebanon Economic Monitor provides an update on key economic developments and policies over the past six months. It also presents findings from recent World Bank work on Lebanon. The political standoff combined with an escalating Syrian conflict hampered growth in 2012, and is projected to continue doing so through the first half of 2013. Economic growth in 2012 is estimated to have decelerated to 1.4 percent due to a weak second half of 2012 following a downturn in the security situation. The major fiscal expansion that took place in 2012 is creating fiscal challenges for 2013, particularly in the context of a promised increase in public salaries. The fiscal expansion, measured by the change in the central government s primary fiscal balance, reached a staggering 4.6 percentage points of GDP in 2012. The overall fiscal deficit reached 9.4 percent of GDP in 2012. Inflationary pressures rose despite tepid economic activity. Headline inflation accelerated notably in the second half of 2012. Core inflation has also been on an upward trend, reaching 5.3 percent by end-2012. Domestically, inflationary pressures can primarily be attributed to (i) increases in disposable income in early 2012 due to the increase in the minimum wage and public sector salaries cost of living adjustment; and (ii) a cumulative output gap that remains positive following above-potential growth in 2007-2010. The conflict in Syria, a country that is closely linked, both through historical, social and economic ties to Lebanon has created a humanitarian crisis of enormous scale. While Lebanon is to be commended for its openness to Syrian refugees, the conflict is severely and negatively impacting the Lebanese economy. The largest impact arises through the insecurity and uncertainty spillovers and touches at the heart of Lebanon s societal fabric.
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Making more people aware of useful information, essential services and products and influencing them to use these effectively is the ultimate goal of mass media campaigns, and the MA measures the potential effectiveness of media efforts to reach this goal. The effectiveness of communication channels to deliver health and nutrition messages to target beneficiaries to ensure maximum reach and uptake can be viewed in terms of preferences, satisfaction, and trust. Overall, the four most accessed media channels for receiving information among communities in the study areas were village announcements, mobile phones, television, and out-of-home (OOH) media. Of the accessed media channels, the top three most preferred channels were village announcements (40 percent), television (26 percent), and mobile phones (19 percent). In terms of trust, village announcements were the most trusted source of information (64 percent), followed by mobile phones (14 percent) and television (11 percent). Hence of all the media channels, village announcements are the most preferred, have the most satisfied users, and are the most trusted source of information in study communities from four provinces in Lao PDR with some of the highest burden of childhood undernutrition.Publication Education, Social Norms, and the Marriage Penalty(Washington, DC: World Bank, 2024-10-16)A growing literature attributes gender inequality in labor market outcomes in part to the reduction in female labor supply after childbirth, the child penalty. However, if social norms constrain married women’s activities outside the home, then marriage can independently reduce employment, even in the absence childbearing. Given the correlation in timing between childbirth and marriage, conventional estimates of child penalties will conflate these two effects. The paper studies the marriage penalty in South Asia, a context featuring conservative gender norms and low female labor force participation. The study introduces a split-sample, pseudo-panel approach that allows for the separation of marriage and child penalties even in the absence of individual-level panel data. Marriage reduces women’s labor force participation in South Asia by 12 percentage points, whereas the marginal penalty of childbearing is small. Consistent with the central roles of both opportunity costs and social norms, the marriage penalty is smaller among cohorts with higher education and less conservative gender attitudes.Publication South Asia Development Update, April 2024: Jobs for Resilience(Washington, DC: World Bank, 2024-04-02)South Asia is expected to continue to be the fastest-growing emerging market and developing economy (EMDE) region over the next two years. This is largely thanks to robust growth in India, but growth is also expected to pick up in most other South Asian economies. However, growth in the near-term is more reliant on the public sector than elsewhere, whereas private investment, in particular, continues to be weak. Efforts to rein in elevated debt, borrowing costs, and fiscal deficits may eventually weigh on growth and limit governments' ability to respond to increasingly frequent climate shocks. Yet, the provision of public goods is among the most effective strategies for climate adaptation. This is especially the case for households and farms, which tend to rely on shifting their efforts to non-agricultural jobs. These strategies are less effective forms of climate adaptation, in part because opportunities to move out of agriculture are limited by the region’s below-average employment ratios in the non-agricultural sector and for women. Because employment growth is falling short of working-age population growth, the region fails to fully capitalize on its demographic dividend. Vibrant, competitive firms are key to unlocking the demographic dividend, robust private investment, and workers’ ability to move out of agriculture. A range of policies could spur firm growth, including improved business climates and institutions, the removal of financial sector restrictions, and greater openness to trade and capital flows.Publication Economic Recovery(World Bank, Washington, DC, 2021-04-06)World Bank Group President David Malpass spoke about the world facing major challenges, including COVID, climate change, rising poverty and inequality and growing fragility and violence in many countries. He highlighted vaccines, working closely with Gavi, WHO, and UNICEF, the World Bank has conducted over one hundred capacity assessments, many even more before vaccines were available. The World Bank Group worked to achieve a debt service suspension initiative and increased transparency in debt contracts at developing countries. The World Bank Group is finalizing a new climate change action plan, which includes a big step up in financing, building on their record climate financing over the past two years. He noted big challenges to bring all together to achieve GRID: green, resilient, and inclusive development. Janet Yellen, U.S. Secretary of the Treasury, mentioned focusing on vulnerable people during the pandemic. Kristalina Georgieva, Managing Director of the International Monetary Fund, focused on giving everyone a fair shot during a sustainable recovery. All three commented on the importance of tackling climate change.Publication Remarks at the United Nations Biodiversity Conference(World Bank, Washington, DC, 2021-10-12)World Bank Group President David Malpass discussed biodiversity and climate change being closely interlinked, with terrestrial and marine ecosystems serving as critically important carbon sinks. At the same time climate change acts as a direct driver of biodiversity and ecosystem services loss. The World Bank has financed biodiversity conservation around the world, including over 116 million hectares of Marine and Coastal Protected Areas, 10 million hectares of Terrestrial Protected Areas, and over 300 protected habitats, biological buffer zones and reserves. The COVID pandemic, biodiversity loss, climate change are all reminders of how connected we are. The recovery from this pandemic is an opportunity to put in place more effective policies, institutions, and resources to address biodiversity loss.