Lebanon Economic Forecast

Lebanon Economic Outlook

September 4, 2018

Data points to weak economic momentum with exports falling sharply and the trade deficit widening. Moreover, the PMI showed that private sector activity contracted at the sharpest rate since October in 2016 in July due to subdued demand amid political uncertainty. Four months after the 6 May elections, the country remains without a fully-functioning administration as the various parties have yet resolve their issues. The swift formation of a government is needed to tackle a large budget deficit and a sky-high public debt ratio. Against this background, the currency peg has come under stress in recent weeks and led banks to offer high interest rates in local currency deposits in order to stock up on U.S. dollars.

Lebanon Economic Growth

Economic growth will likely remain anemic this year, although robust tourist arrivals should support private consumption. Large twin deficits and an extremely high public debt ratio, which are unlikely to improve significantly over the forecast horizon, present large risks to the outlook. Met the why particular panelists expect growth of 1.8% in 2018, down 0.1 percentage points from last month’s forecast, and 2.4% in 2019.

Lebanon Economy Data

20132014201520162017
Population (million)4.44.44.44.54.5
GDP per capita (USD)11,37111,80211,18811,293-  
GDP (USD bn)45.947.849.550.4-  
Economic Growth (GDP, annual variation in %)2.62.00.81.0-  
Unemployment Rate6.26.26.26.26.3
Fiscal Balance (% of GDP)-8.7-6.0-7.3-9.2-7.3
Public Debt (% of GDP)138139142151153
Inflation Rate (CPI, annual variation in %, eop)1.1-0.7-3.43.15.0
Inflation Rate (CPI, annual variation in %)4.81.9-3.8-0.84.5
Exchange Rate (vs USD)1,5081,5081,5081,5081,508
Current Account (% of GDP)-26.7-28.1-19.6-23.3-  
Trade Balance (USD billion)-15.3-17.5-15.0-15.4-15.9
Exports (USD billion)5.24.54.03.94.0
Imports (USD billion)20.522.119.019.419.9
Exports (annual variation in %)-7.9-12.2-12.5-1.32.4
Imports (annual variation in %)0.87.7-14.12.12.8
International Reserves (USD)36.739.538.843.343.5
External Debt (% of GDP)67.462.662.463.4-  

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Lebanon Facts

ValueChangeDate
Exchange Rate1,5130.0 %Sep 24
Stock Market9710.37 %Sep 24

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