Publication: Lebanon Economic Monitor, Spring 2025: Turning the Tide?
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2025-06-20
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2025-06-20
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Lebanon’s economic outlook for 2025 is shaped by a fragile stabilization in the political and security environment. This follows the end of the conflict and the resolution of a two year political paralysis with the election of a president and the formation of a reform-oriented government. While this renewed momentum presents an opportunity to begin addressing Lebanon’s overlapping financial, economic, and institutional crises, the outlook remains highly contingent on sustained improvements in the security situation and tangible progress on key reforms. The real GDP contraction for 2024 has been revised downward to 7.1 percent, bringing the cumulative decline since 2019 to nearly 40 percent. The conflict and its aftermath have exacerbated poverty and vulnerability in Lebanon. Agriculture, commerce, and tourism, sectors accounting for 77 percent of economic losses, are key income sources for low-wage and informal workers now at risk. Reconstruction efforts remain slow, constrained by Lebanon’s ongoing financial crisis and a lack of external financing, which is unlikely to materialize without comprehensive reforms. Drawing on two decades of policy dialogue, technical assistance, and World Bank-financed projects, the Special Focus offers a contribution to the government’s reform agenda by outlining a targeted one-year policy action plan. The ministerial statement sets out four high-level overarching priorities: (i) halting financial and economic deterioration and identifying growth enablers; (ii) strengthening social security; (iii) combating waste and corruption; and (iv) preparing a fair parliamentary elections law (the latter falls outside the scope of the Special Focus). To support government reform, the Special Focus offers a comprehensive one-year policy action plan that brings together and distills key lessons from years of World Bank engagement and policy dialogue in Lebanon into a set of feasible, high-impact actions that align with the government’s stated objectives and can be implemented within its limited tenure. Proposed policy actions prioritized restoring macro-financial stability, rebuilding citizens’ trust, and laying the foundation for a new, successful economic development model.
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“World Bank. 2025. Lebanon Economic Monitor, Spring 2025: Turning the Tide?. © World Bank. http://hdl.handle.net/10986/43357 License: CC BY-NC 3.0 IGO.”
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Publication Lebanon Economic Monitor, Spring 2021(World Bank, Washington, DC, 2021-05-31)The Lebanon financial and economic crisis is likely to rank in the top 10, possibly top three, most severe crises episodes globally since the mid-nineteenth century. This is a conclusion of the Spring 2021 Lebanon economic monitor (LEM) in which the Lebanon crisis is contrasted with the most severe global crises episodes as observed by Reinhart and Rogoff over the 1857-2013 period. The Lebanon economic monitor provides an update on key economic developments and policies over the past six months. Monetary and financial turmoil are driving crisis conditions, more palpably through interactions between the exchange rate, narrow money, and inflation. Real gross domestic product (GDP) growth is estimated to have contracted by 20.3 percent in 2020, on the back of a 6.7 percent contraction in 2019. 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This strategy will be based on: (i) a debt restructuring program that will achieve short-term fiscal space and medium-term debt sustainability; (ii) comprehensively restructuring the financial sector in order to regain solvency of the banking sector; (iii) adopting a new monetary policy framework that will regain confidence and stability in the exchange rate; (iv) a phased fiscal adjustment aimed at regaining confidence in fiscal policy; (v) growth enhancing reforms; and (vi) enhanced social protection.Publication Social Protection in Fragile and Conflict-Affected Countries(World Bank, Washington, DC, 2015-04)This study examines the role of social protection programming, and programming design and implementation features, that are prominent in fragile and conflict-affected states. 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Finally, the study highlights social protection and labor program delivery in seven different country contexts, and discusses the country-specific programming options chosen to achieve the objectives and overcome capacity and operational constraints.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 2016(Washington, DC, 2016-07)The geo-economy presents Lebanon with challenges associated with being a nexus for regional fault lines and risks from its dependence on capital inflows. Despite markedly improved security conditions since the start of 2015, anxiety over regional turmoil and potential spillover effectspersist. All the while, Lebanon continues to be, by far, the largest host of Syrian refugees (in proportion to the population). In addition, the economy’s dependence on its diaspora to finance internal and external imbalances exposes Lebanon to economic and political conditions beyond its influence. Despite these challenges and risks, the political process remains impaired with the vacant presidency completing its second year with uncertain prospects of a near-term resolution. On the other hand, a short-term solution has been found to the garbage crisis that has left piles of trash uncollected on the streets across the country since summer 2015. 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. Its coverage ranges from the macro-economy to financial markets to indicators of human welfare and development.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. 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