World Bank2025-06-202025-06-202025-06-20https://hdl.handle.net/10986/43357Lebanon’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.en-USCC BY-NC 3.0 IGOECONOMIC GROWTHFRAGILE AND CONFLICT-AFFECTED STATESPOLITICAL AND SECURITY ENVIRONMENTREAL GDP CONTRACTIONPOVERTY AND VULNERABILITYReportWorld Bankhttps://doi.org/10.1596/43357