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Economy of Lebanon
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{{Short description|none}} {{Use dmy dates|date=June 2023}} {{Infobox economy | country = Lebanon | image = Zaitunay Bay, Downtown Beirut, Lebanon.jpg | image_size = 310px | caption = [[Beirut Central District]] | currency = [[Lebanese Pound]] (LBP) | year = Calendar | organs = [[Council of Arab Economic Unity|CAEU]] | group = {{plainlist| *[[Developing country|Developing/Emerging]]<ref>{{cite web |url=https://www.imf.org/external/pubs/ft/weo/2019/01/weodata/weoselco.aspx?g=2200&sg=All+countries+%2f+Emerging+market+and+developing+economies |title=World Economic Outlook Database, April 2019 |publisher=[[International Monetary Fund]] |website=IMF.org |access-date=29 September 2019}}</ref> *Lower-middle income economy<ref>{{cite web |url=https://datahelpdesk.worldbank.org/knowledgebase/articles/906519-world-bank-country-and-lending-groups |title=World Bank Country and Lending Groups |publisher=[[World Bank]] |website=datahelpdesk.worldbank.org |access-date=29 September 2019}}</ref>}} | population = 6,825,232 (20 April 2020)<ref>{{Cite web|url=https://worldpopulationreview.com/countries/lebanon-population|title=Lebanon Population 2020 (Demographics, Maps, Graphs)|website=worldpopulationreview.com}}</ref> | gdp = {{plainlist| *{{decrease}} $21,7 billion (nominal; 2022 est.) at official cash withdrawal ratio 1500/3900<ref name="IMFWEOLB">{{cite web |url=https://www.imf.org/external/datamapper/NGDPD@WEO/LBN |title=World Economic Outlook Database, April 2021 |publisher=[[International Monetary Fund]] |website=IMF.org |access-date=1 April 2021}}</ref> *{{decrease}} $74.110 billion ([[Purchasing power parity|PPP]]; 2020 est.)<ref>{{Cite web|url=https://www.imf.org/external/datamapper/PPPGDP@WEO/LBN |title=World Economic Outlook(april 2021) |website=imf.org}}</ref> | growth = {{plainlist| *−1.9% (2018) −6.7% (2019e) *−25.0% (2020f)<ref>{{cite web |title=Global Economic Outlook, April 2021 |url=https://www.imf.org/external/datamapper/NGDP_RPCH@WEO/LBN |imf.org |publisher=[[International Monetary Fund]] |access-date=1 April 2021}}</ref>}} −6.3% (2021f)<ref>{{cite journal |title=Global Economic Prospects, June 2020 |page=92 |url=https://openknowledge.worldbank.org/handle/10986/33748 |website=openknowledge.worldbank.org |date=8 June 2020 |publisher=[[World Bank]] |access-date=5 August 2020}}</ref>}} | rank = | per capita = {{plainlist| *{{decrease}} $4,000 (nominal, 2020.)<ref name="IMFWEOLB" /> *{{decrease}} $20,429 ([[Purchasing power parity|PPP]], 2020.)<ref name="IMFWEOLB" />}} <ref>{{cite web| url = https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?locations=LB | title = GDP per capita (current US$) - Lebanon {{!}} Data}}</ref> | per capita rank = | sectors = {{plainlist| *[[Primary sector of the economy|agriculture]]: 3.9% *[[Secondary sector of the economy|industry]]: 13.1% *[[Tertiary sector of the economy|services]]: 83% *(2017 est.)<ref name="CIA World Fact Book – Lebanon">{{cite web |url=https://www.cia.gov/the-world-factbook/countries/lebanon/ |title=Middle East :: Lebanon – The World Factbook |publisher=Central Intelligence Agency |access-date= 6 February 2019}}</ref>}} | inflation = 210% (2022 est.)<ref name="2020/01">{{cite web |title=World Economic Outlook Database, April 2020 |url=https://www.imf.org/external/pubs/ft/weo/2020/01/weodata/weorept.aspx?pr.x=51&pr.y=14&sy=2017&ey=2020&scsm=1&ssd=1&sort=country&ds=.&br=1&c=446&s=NGDP_RPCH%2CPPPGDP%2CPCPIPCH&grp=0&a= |website=IMF.org |publisher=International Monetary Fund |access-date=28 April 2020}}</ref> | poverty = {{plainlist| *27.4% (2012)<ref>{{cite web |url=https://data.worldbank.org/indicator/SI.POV.NAHC?locations=LB&name_desc=false |title=Poverty headcount ratio at national poverty lines (% of population) – Lebanon |publisher=[[World Bank]] |website=data.worldbank.org |access-date=19 October 2019}}</ref> *63% on less than $5.50/day (2011)<ref>{{cite web |url=https://data.worldbank.org/indicator/SI.POV.UMIC?locations=LB&name_desc=false |title=Poverty headcount ratio at $5.50 a day (2011 PPP) (% of population) – Lebanon |publisher=[[World Bank]] |website=data.worldbank.org |access-date=19 October 2019}}</ref>}} | gini = 31.8 {{color|darkorange|medium}} (2011)<ref>{{cite web |url=https://data.worldbank.org/indicator/SI.POV.GINI?locations=LB&name_desc=false |title=GINI index (World Bank estimate) – Lebanon |publisher=[[World Bank]] |website=data.worldbank.org |access-date=19 October 2019}}</ref> | hdi = {{plainlist| *{{decrease}} 0.706 {{color|green|high}} (2021)<ref>{{cite web |url=http://hdr.undp.org/en/indicators/137506 |title=Human Development Index (HDI) |publisher=[[Human Development Report|HDRO (Human Development Report Office)]] [[United Nations Development Programme]] |website=hdr.undp.org |access-date=17 November 2022}}</ref> ([[List of countries by Human Development Index|112th]]) *N/A [[List of countries by inequality-adjusted HDI|IHDI]] (2021)<ref>{{cite web |url=http://hdr.undp.org/en/content/table-3-inequality-adjusted-human-development-index-ihdi |title=Inequality-adjusted Human Development Index (IHDI) |publisher=[[Human Development Report|HDRO (Human Development Report Office)]] [[United Nations Development Programme]] |website=hdr.undp.org |access-date=17 November 2022}}</ref>}} | edbr = {{decrease}} [[Ease of doing business index#Ranking|143rd (medium, 2020)]]<ref name="World Bank and International Financial Corporation">{{cite web |url=http://www.doingbusiness.org/data/exploreeconomies/lebanon |title=Ease of Doing Business in Lebanon |publisher=Doingbusiness.org |access-date=2017-01-23 }}</ref> | labor = {{plainlist| *{{increase}} 2,399,073 (2019)<ref>{{cite web |url=https://data.worldbank.org/indicator/SL.TLF.TOTL.IN?locations=LB |title=Labor force, total – Lebanon |publisher=[[World Bank]] |website=data.worldbank.org |access-date=25 December 2019}}</ref> *in addition, there are as many as 1 million foreign workers<ref name="CIA World Fact Book – Lebanon" /> *39.5% employment rate (2007)<ref>{{cite web |url=https://data.worldbank.org/indicator/SL.EMP.TOTL.SP.NE.ZS?locations=LB |title=Employment to population ratio, 15+, total (%) (national estimate) – Lebanon |publisher=[[World Bank]] |website=data.worldbank.org |access-date=25 December 2019}}</ref>}} | occupations = {{plainlist| *[[Primary sector of the economy|agriculture]]: 11.94% *[[Secondary sector of the economy|industry]]: 22.3% *[[Tertiary sector of the economy|services]]: 65.76% (2019)<ref>{{Cite web|url=https://www.statista.com/statistics/455264/employment-by-economic-sector-in-lebanon/|title=Lebanon – employment by economic sector in 2009–2019|website=Statista}}</ref>}} | unemployment = 6.2% (2019)<ref>{{Cite web|url=https://www.statista.com/statistics/808760/unemployment-rate-in-lebanon/|title=Lebanon – unemployment rate 1999–2019|website=Statista}}</ref> | industries = banking, tourism, real estate and construction, food processing, wine, jewelry, cement, textiles, mineral and chemical products, wood and furniture products, oil refining, metal fabricating | exports = {{decrease}} $4.79 billion (2021)<ref name="OEC" /> | export-goods = jewelry, base metals, chemicals, consumer goods, fruit and vegetables, tobacco, construction minerals, electric power machinery and switchgear, textile fibers, paper | export-partners = {{plainlist| *{{flag|European Union}} 14.35% *{{flag|United Arab Emirates}} 21% *{{flag|Switzerland}} 9.41% *{{flag|Cameroon}} 5.91% *{{flag|Egypt}} 5.87% *{{flag|Qatar}} 4.34% *{{flag|United States}} 3.83% *{{flag|Saudi Arabia}} 2.96% *{{flag|Iraq}} 2.61% *{{flag|Turkey}} 2.33% (2021)<ref name="OEC">{{cite web |title=Foreign trade partners of Lebanon |url=https://oec.world/en/visualize/tree_map/hs92/export/lbn/show/all/2021/ |publisher=[[The Observatory of Economic Complexity]] |access-date=19 June 2021}}</ref>}} | imports = {{decrease}} $16.3 billion (2021)<ref name="OEC" /> | import-goods = petroleum products, cars, medicinal products, clothing, meat and live animals, consumer goods, paper, textile fabrics, tobacco, electrical machinery and equipment, chemicals | import-partners = {{plainlist| *{{flag|European Union}} 38.67% *{{flag|Turkey}} 10.5% *{{flag|China}} 9.42% *{{flag|UAE}} 5.78% *{{flag|United States}} 5.03% *{{flag|Russia}} 3.5% *{{flag|Egypt}} 2.49% *{{flag|Switzerland}} 2.42% *{{flag|Ukraine}} 2.41% *{{flag|India}} 1.81% (2021)<ref name="OEC" />}} | current account = {{decrease}} −$12.37 billion (2017 est.)<ref name="CIA World Fact Book – Lebanon" /> | FDI = {{plainlist| *{{increase}} $61.02 billion (2016)<ref name="CIA World Fact Book – Lebanon" /> *{{increase}} Abroad: $13.46 billion (2016)<ref name="CIA World Fact Book – Lebanon" />}} | gross external debt = {{increaseNegative}} $33.1 billion (December 2018)<ref>{{Cite web|url=https://www.ceicdata.com/en/indicator/lebanon/external-debt|title=Lebanon External Debt [2002 – 2020] [Data & Charts]|website=www.ceicdata.com}}</ref> | debt = US$74.5 billion<ref>{{cite web|title=public debt net total debt|publisher=banque du liban|url=http://www.bdl.gov.lb/webroot/statistics/table.php?name=t531-4|access-date=23 January 2019|archive-date=9 November 2019|archive-url=https://web.archive.org/web/20191109220604/http://www.bdl.gov.lb/webroot/statistics/table.php?name=t531-4|url-status=dead}}</ref><ref>Ministry of Finance: Debt Reports: http://www.finance.gov.lb/en-US/finance/PublicDebt/Pages/DebtReports.aspx {{Webarchive|url=https://web.archive.org/web/20170808072405/http://www.finance.gov.lb/en-US/finance/PublicDebt/Pages/DebtReports.aspx |date=8 August 2017 }}</ref> (Sep 2018),<br /> 140% of GDP (2018) | revenue = 11.62 billion (2017 est.)<ref name="CIA World Fact Book – Lebanon" /> | expenses = 15.38 billion (2017 est.)<ref name="CIA World Fact Book – Lebanon" /> | balance = −6.9% (of GDP) (2017 est.)<ref name="CIA World Fact Book – Lebanon" /> | credit = {{plainlist| *[[Standard & Poor's]]:<ref>{{cite web |title=Standard & Poor's: Lebanon |url=https://www.standardandpoors.com/en_US/web/guest/ratings/entity/-/org-details/sectorCode/SOV/entityId/310484 |access-date=9 March 2019}}</ref> *B- *Outlook: Negative *[[Moody's]]:<ref name=moodys>{{cite news |title=Rating Action: Moody's downgrades Lebanon's rating to C from Ca |date=27 July 2020 |url=https://www.moodys.com/research/Moodys-downgrades-Lebanons-rating-to-C-from-Ca--PR_428833|publisher=Moody's}}</ref> *C *Outlook: Not assigned *[[Fitch Group|Fitch]]:<ref>{{cite web |title=Fitch Downgrades Lebanon to 'CCC' |url=https://www.fitchratings.com/site/pr/10086997|publisher=Fitch}}</ref> *CCC *Outlook: N/A}} | aid = recipient $5.4 billion (2014 est.) | reserves = {{decrease}} $55.42 billion (31 December 2017 est.)<ref name="CIA World Fact Book – Lebanon" /> | cianame = lebanon }} The '''economy of Lebanon''' has been experiencing a large-scale multi-dimensional crisis since 2019,<ref>{{Cite web|title=Lebanon Sinking into One of the Most Severe Global Crises Episodes, amidst Deliberate Inaction|url=https://www.worldbank.org/en/news/press-release/2021/05/01/lebanon-sinking-into-one-of-the-most-severe-global-crises-episodes|access-date=2021-11-22|website=World Bank|language=en}}</ref> including a banking collapse, [[Lebanese liquidity crisis|the Lebanese liquidity crisis]] and a [[sovereign default]].<ref>{{Cite news|last1=Stubbington|first1=Tommy|last2=Cornish|first2=Chloe|date=2020-03-10|title=Lebanon's sovereign default leaves creditors facing big losses|work=Financial Times|url=https://www.ft.com/content/75990a94-62c7-11ea-a6cd-df28cc3c6a68 |archive-url=https://ghostarchive.org/archive/20221210/https://www.ft.com/content/75990a94-62c7-11ea-a6cd-df28cc3c6a68 |archive-date=10 December 2022 |url-access=subscription|access-date=2021-11-22}}</ref> It is classified as a [[developing economy|developing]], lower-middle income economy. The [[List of countries by GDP (nominal)|nominal GDP]] was estimated at $19 billion in 2020,<ref name="IMFWEOLB"/> with a [[List of countries by GDP (nominal) per capita|per capita GDP]] amounting to $2,500. In 2018 government spending amounted to $15.9 billion,<ref>{{cite news |url=https://www.reuters.com/article/lebanon-economy-budget/update-2-lebanons-cabinet-agrees-2018-budget-with-lower-deficit-idUSL8N1QU5KH |title=Lebanon's cabinet agrees 2018 budget with lower deficit |publisher=Reuters |access-date=17 February 2019}}</ref> or 83% of GDP. The [[Lebanon|Lebanese]] economy went through a significant expansion after the 34-day [[Lebanon war 2006|war of 2006]], with growth averaging 9.1% between 2007 and 2010.<ref name="worldbank_growth3">{{cite news |title=GDP growth(annual %) |publisher=Worldbank |url=https://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG?locations=LB |url-status=live |access-date=29 January 2019 |archive-url=https://web.archive.org/web/20190126113843/https://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG?locations=LB |archive-date=26 January 2019}}</ref> After 2011 the local economy was affected by the [[Syrian civil war]], growing by a yearly average of 1.7% on the 2011–2016 period and by 1.5% in 2017.<ref name="worldbank_growth3" /> In 2018, the size of the GDP was estimated to be $54.1 billion.<ref name="CIA World Fact Book - Lebanon2">{{cite web |title=Lebanon |url=https://www.cia.gov/the-world-factbook/countries/lebanon/ |access-date=6 May 2018 |work=The World Factbook |publisher=Central Intelligence Agency}}</ref> Between 2019 and 2021, the economy shrank by 53.4%, the highest contraction in a list of 193 countries.<ref>{{Cite web |title=Lebanon Economic Monitor, Fall 2021: The Great Denial |url=https://www.worldbank.org/en/country/lebanon/publication/lebanon-economic-monitor-fall-2021-the-great-denial |access-date=2023-04-11 |website=World Bank |language=en}}</ref> Since 2020, the [[International Monetary Fund]] no longer publishes data on the Lebanese economy. Lebanon is the third-highest indebted country in the world in terms of [[debt-to-GDP ratio]]. As a consequence, interest payments consumed 48% of domestic government revenues in 2016, thus limiting the government's ability to make needed investments in infrastructure and other public goods.<ref>{{cite news|last1=Barrington|first1=Lisa|title=Lebanon embarks on long-delayed reforms but debt problems mount|url=https://www.reuters.com/article/us-lebanon-economy-analysis/lebanon-embarks-on-long-delayed-reforms-but-debt-problems-mount-idUSKCN1BA0IN|access-date=14 October 2017|work=[[Reuters]]|date=30 August 2017}}</ref> The Lebanese economy is service-oriented. Lebanon has a strong tradition of ''[[laissez-faire]]'', with the [[wikisource:en:Constitution of Lebanon#preamble f|country's constitution]] stating that "the economic system is free and ensures private initiative and the right to private property". The major economic sectors include metal products, banking, agriculture, chemicals, and transport equipment. The main growth sectors include banking and tourism. There are no restrictions on foreign exchange or capital movement.<ref>{{Cite web |title=Lebanon - Foreign Exchange Controls {{!}} Privacy Shield |url=https://www.privacyshield.gov/ps/article?id=Lebanon-Foreign-Exchange-Controls#:~:text=Lebanon%20imposes%20no%20foreign%20exchange,and%20free%20movement%20of%20capital. |access-date=2024-07-09 |website=www.privacyshield.gov |language=en}}</ref> == History == {{see also|History of Lebanon}} {| class="wikitable sortable collapsible collapsed" style="float: right;" |+GDP per capita in international dollars, 1980–2012<ref>{{cite web|url=http://www.imf.org/external/pubs/ft/weo/2012/01/weodata/weorept.aspx?pr.x=22&pr.y=18&sy=1980&ey=2012&scsm=1&ssd=1&sort=country&ds=.&br=1&c=406&s=PPPPC&grp=1&a=1 |title=Middle East and North Africa, Gross domestic product (PPP) per capita GDP, 1980–2012 |publisher=International Monetary Fund |date=14 September 2006 |access-date=17 January 2013}}</ref><ref>{{cite web|url=http://www.imf.org/external/pubs/ft/weo/2012/01/weodata/weorept.aspx?pr.x=67&pr.y=20&sy=1980&ey=2012&scsm=1&ssd=1&sort=country&ds=.&br=1&c=446&s=NGDP_RPCH%2CNGDPDPC%2CPPPPC&grp=0&a= |title=Lebanon, Gross domestic product (PPP) per capita GDP, 1980–2012 |publisher=International Monetary Fund |date=14 September 2006 |access-date=17 January 2013}}</ref> ! Year || Lebanon || [[MENA]] avg |- | 1972 || 5,322 || 3,346 |- | 1981 || 5,897 || 3,581 |- | 1982 || 3,970 || 3,681 |- | 1983 || 5,064 || 3,781 |- | 1984 || 7,592 || 3,903 |- | 1985 || 9,613 || 3,980 |- | 1986 || 9,025 || 3,873 |- | 1987 || 10,722 || 3,869 |- | 1988 || 7,875 || 3,826 |- | 1989 || 4,674 || 4,001 |- | 1990 || 4,158 || 4,191 |- | 1991 || 5,649 || 4,472 |- | 1992 || 5,925 || 4,570 |- | 1993 || 6,352 || 4,658 |- | 1994 || 6,868 || 4,764 |- | 1995 || 7,320 || 4,860 |- | 1996 || 7,606 || 5,138 |- | 1997 || 7,892 || 5,352 |- | 1998 || 8,031 || 5,512 |- | 1999 || 7,928 || 5,585 |- | 2000 || 8,077 || 5,876 |- | 2001 || 8,478 || 6,063 |- | 2002 || 8,792 || 6,261 |- | 2003 || 9,144 || 6,711 |- | 2004 || 9,959 || 7,175 |- | 2005 || 10,367 || 7,360 |- | 2006 || 10,751 || 7,882 |- | 2007 || 11,893 || 8,354 |- | 2008 || 13,116 || 8,735 |- | 2009 || 14,197 || 10,862 |- | 2010 || 15,168 || 10,920 |- | 2011 || 15,523 || 11,896 |- | 2012 || 15,985 || 13,088 |} [[File:Beirut 002.jpg|thumb|200x200px|A pedestrian-only street in [[Beirut]]'s central district.]] The 1975–1990 [[Lebanese Civil War]] seriously damaged [[Lebanon]]'s economic [[infrastructure]], cut national output by half,<ref name="Stinson">{{Cite news|url=http://usatoday30.usatoday.com/news/world/2006-08-01-lebanon-forces_x.htm|title=Lebanese forces may play bigger role in war|last=Stinson|first=Jefferey|date=1 August 2006|work=USA Today |access-date=22 August 2009}}</ref> and had major consequences for Lebanon's position as a [[Middle East]]ern [[entrepot]] and [[bank]]ing hub.<ref name="cia">[https://www.cia.gov/the-world-factbook/countries/lebanon/ Lebanon]. ''[[The World Factbook]]''. [[Central Intelligence Agency]].</ref> After the war, the central government regained its ability to control key port and government facilities. As a result, GDP per capita expanded 353% in the 1990s.<ref>{{cite web|url=http://earthtrends.wri.org/text/economics-business/variable-638.html|archive-url=https://web.archive.org/web/20080131140920/http://earthtrends.wri.org/text/economics-business/variable-638.html|archive-date=31 January 2008|title=Economics, Business, and the Environment – GDP: GDP per capita, current US dollars|publisher=EarthTrends |access-date=31 December 2008}}</ref> Economic recovery has been helped by a financially sound banking system and resilient small- and medium-scale manufacturers, with family remittances, banking services, manufactured and farm exports, and international aid as the main sources of foreign exchange.<ref name="cia2001">{{cite web|url=http://teacherlink.ed.usu.edu/tlresources/reference/2001WorldFactbook/LEBANON.PDF |archive-url=https://web.archive.org/web/20070604195718/http://teacherlink.ed.usu.edu/tlresources/reference/2001WorldFactbook/LEBANON.PDF |archive-date=4 June 2007 |title=CIA World Factbook 2001 |access-date=17 January 2013}}</ref> Lebanon's economy has made impressive gains since the launch of "Horizon 2000," the government's $20 billion reconstruction program in 1993. Real [[Gross domestic product|GDP]] grew 8% in 1994 and 7% in 1995 before [[Israel]]'s [[Operation Grapes of Wrath]] in April 1996 stunted economic activity. Real GDP grew at an average annual rate of less than 3% per year for 1997 and 1998 and only 1% in 1999. During 1992–98, annual inflation fell from more than 100% to 5%, and [[foreign exchange reserves]] jumped to more than $6 billion from $1.4 billion. Burgeoning capital inflows have generated foreign payments surpluses, and the Lebanese pound has remained relatively stable. Progress also has been made in rebuilding Lebanon's war-torn physical and financial infrastructure. [[Solidere]], a $2-billion firm, is managing the reconstruction of Beirut's [[Beirut Central District|central business district]]; the [[Beirut Stock Exchange|stock market]] reopened in January 1996, and international banks and insurance companies are returning. The government nonetheless faces serious challenges in the economic arena. It has had to fund reconstruction by tapping foreign exchange reserves and boosting borrowing. Reducing the government budget deficit is a major goal of the current government. The gap between rich and poor grew in the 1990s, resulting in popular dissatisfaction over the skewed distribution of the reconstruction's benefits and leading the government to shift its focus from rebuilding infrastructure to improving living conditions. After the end of the civil war, Lebanon enjoyed considerable stability, Beirut's reconstruction was almost complete,<ref>{{cite web |url=http://www.csbe.org/saliba/essay1.htm |archive-url=https://web.archive.org/web/20020120135232/http://csbe.org/Saliba/essay1.htm |archive-date=20 January 2002 |title=Deconstructing Beirut's Reconstruction: 1990–2000 |publisher=Center for the Study of the Built Environment |access-date=31 October 2006}}</ref> and increasing numbers of tourists poured into the nation's resorts.<ref name="tourism">{{cite news |url=http://www.chron.com/default/article/Lebanon-hopes-for-stability-so-tourism-industry-1895818.php |author=Anna Johnson|year=2006 |title=Lebanon: Tourism Depends on Stability |newspaper=Chron |access-date=31 October 2006}}</ref> The economy witnessed growth, with bank assets reaching over US$75 billion,<ref name="economy-stat">{{cite web|url=http://www.audi.com.lb/geteconomy/quarterly/lebanon.pdf |archive-url=https://web.archive.org/web/20081123013845/http://www.audi.com.lb/geteconomy/quarterly/lebanon.pdf |archive-date=23 November 2008 |title=Lebanon Economic Report: 2nd quarter, 2006 |publisher=Bank Audi |access-date=17 January 2013}}</ref> [[Market capitalization]] was also at an all-time high, estimated at $10.9 billion at the end of the second quarter of 2006.<ref name="economy-stat" /> The month-long [[2006 Lebanon War|2006 war]] severely damaged Lebanon's economy, especially the tourism sector.<ref>{{cite web |url=http://www.rebuildlebanon.gov.lb/documents/ImpactonfinanceReport-Englishversion-06.pdf |title=Impact of the July Offensive on the Public Finances in 2006 |publisher=Lebanese Ministry of Finance |access-date=17 January 2013 |archive-date=8 August 2019 |archive-url=https://web.archive.org/web/20190808155044/http://www.rebuildlebanon.gov.lb/documents/ImpactonfinanceReport-Englishversion-06.pdf |url-status=dead }}</ref> Over the course of 2008 Lebanon rebuilt its infrastructure mainly in the real estate and tourism sectors, resulting in a comparatively robust post war economy. Major contributors to the reconstruction of Lebanon include [[Saudi Arabia]] (with US$1.5 billion pledged),<ref>{{cite web|url=http://www.cynews.com/news/7005070415/ |archive-url=https://web.archive.org/web/20070928180742/http://www.cynews.com/news/7005070415/ |archive-date=28 September 2007 |title=Saudi Arabia Key Contributor To Lebanon's Reconstruction |author=Joseph S. Mayton |publisher=Cyprus News |date=28 September 2007 |access-date=17 January 2013}}</ref> the European Union (with about $1 billion)<ref>{{cite web|url=http://reliefweb.int/report/lebanon/donors-pledge-940-million-lebanon |title=Donors pledge more than $940 million for Lebanon |publisher=Reliefweb.int |date=31 August 2006 |access-date=17 January 2013}}</ref> and a few other Persian Gulf countries with contributions of up to $800 million.<ref>{{cite web|url=http://www.ain-al-yaqeen.com/issues/20060825/feat2en.htm |archive-url=https://archive.today/20061020061315/http://www.ain-al-yaqeen.com/issues/20060825/feat2en.htm |url-status=dead |archive-date=20 October 2006 |title=The Custodian of the Two Holy Mosques Reviews with the Jordanian King the Situation in Lebanon... |publisher=Ain-Al-Yaqeen |access-date=17 January 2013}}</ref> Given the frequent security turmoil it has faced, the Lebanese banking system has adopted a conservative approach, with strict regulations imposed by the central bank to protect the economy from political instability. These regulations have generally left Lebanese banks unscathed by the [[2008 financial crisis]]. Lebanese banks remain, under the current circumstances, high on liquidity and reputed for their security.<ref name="Lebanon Banks immune">{{cite news|url=http://news.bbc.co.uk/2/hi/middle_east/7764657.stm|title=Lebanon 'immune' to financial crisis|work=BBC News |date=5 December 2008|access-date=28 January 2010}}</ref> In late 2008, [[Moody's]] shifted Lebanon's sovereign rankings from stable to positive, acknowledging its financial security.<ref>{{cite web|url=https://www.moodys.com/research/Moodys-changes-outlook-for-Lebanons-sovereign-ratings-to-positive-from--PR_169067|title=Moody's changes outlook for Lebanon's sovereign ratings to positive from stable|publisher=Moody's|date=11 December 2008}}</ref> Moreover, with an increase of 51% in the [[Beirut Stock Exchange|Beirut stock market]], the index provider [[MSCI]] ranked Lebanon the world's best performer in 2008.<ref name="Lebanon 2008 profit" /> Lebanon is one of the only seven countries in the world in which the value of the stock market increased in 2008.<ref name="Lebanon 2008 profit">{{cite news|url=http://www.timesonline.co.uk/tol/money/investment/article4881201.ece|archive-url=https://web.archive.org/web/20100525123917/http://www.timesonline.co.uk/tol/money/investment/article4881201.ece|archive-date=25 May 2010|title=Where on earth can you make a decent return?|newspaper=The Sunday Times |date=5 October 2008 |location=London|access-date=28 January 2010 |first=Kathryn |last=Cooper}}</ref> The Lebanese economy experienced continued resilience, growing 8.5 percent in 2008, 7 percent in 2009 and 8.8% in 2010. However, Lebanon's debt to GDP ratio remained one of the highest in the world.<ref>{{cite web |url=https://www.cia.gov/library/publications/the-world-factbook/rankorder/2186rank.html |title=Public debt percentages of GDP |publisher=CIA |work=The World Factbook |date=2014 |access-date=20 April 2015 |archive-date=13 June 2007 |archive-url=https://web.archive.org/web/20070613005546/https://www.cia.gov/library/publications/the-world-factbook/rankorder/2186rank.html |url-status=dead }}</ref> The [[Syrian civil war|Syrian crisis]] has significantly affected Lebanese economic and financial situation. The demographic pressure imposed by the Syrian refugees now living in Lebanon has led to competition in the labour market. As a direct consequence unemployment has doubled in three years, reaching 20% in 2014. A loss of 14% of wages regarding the salary of less-skilled workers has also been registered. The financial constraints were also felt: the poverty rate increased with 170,000 Lebanese falling under the poverty threshold. In the period between 2012 and 2014, the public spending increased by $1 billion and losses amounted to $7.5 billion. Expenditures related only to the Syrian refugees were estimated by the Central Bank of Lebanon as $4.5 billion every year.<ref name="chronicle.fanack.com">{{cite web |last1=Fanack |title=Lebanon: Syrian Refugees Cost the Economy $4.5 Billion Every Year |url=https://chronicle.fanack.com/lebanon/economy/lebanon-syrian-refugees-cost-the-economy-4-5-billion-every-year/ |url-status=dead |archive-url=https://web.archive.org/web/20150714171926/https://chronicle.fanack.com/lebanon/economy/lebanon-syrian-refugees-cost-the-economy-4-5-billion-every-year/ |archive-date=14 July 2015 |access-date=14 July 2015 |website=Fanack.com}}</ref> The International Monetary Fund issued a second report on Lebanon in October 2015, where its expectations of the economic growth rate were lowered to 2%, compared to the 2.5% growth rate of the first report, released in April 2015.<ref>{{cite web|title=Influx of Syrian Refugees Continues to Impact Lebanese Economy|url=https://chronicle.fanack.com/lebanon/economy/syrian-refugees-economic-impact/|website=Fanack.com|date=28 June 2016|access-date=25 July 2016|archive-date=14 January 2019|archive-url=https://web.archive.org/web/20190114113819/https://fanack.com/lebanon/economy/syrian-refugees-economic-impact/|url-status=dead}}</ref> In October 2019, [[Lebanon]] witnessed nationwide protests that erupted over the country's deteriorating economic conditions. Thousands of demonstrations took to the streets of downtown [[Beirut]], calling for the government of Prime Minister [[Saad al-Hariri]] to quit over "its utter failure to stop the deterioration of the economic and living conditions in the country". The protests began after the government announced to charge 20 cents per day for [[Voice over IP|Voice over Internet Protocol]] (VoIP) over social media apps, including [[WhatsApp]], [[Facebook]], and other applications.<ref>{{cite web|url=https://www.westport-news.com/news/article/Nationwide-protests-erupt-in-Lebanon-as-economic-14544564.php|title=Nationwide protests erupt in Lebanon as economic crisis deepens|access-date=18 October 2019|website=Westport News|date=18 October 2019|archive-date=19 October 2019|archive-url=https://web.archive.org/web/20191019120749/https://www.westport-news.com/news/article/Nationwide-protests-erupt-in-Lebanon-as-economic-14544564.php|url-status=dead}}</ref> Lebanon has a very high level of public debt and large external financing needs.<ref name="expus">{{cite web |title=Doing Business in Lebanon |url=http://export.gov/lebanon/static/Doing%20Business%20in%20Lebanon_Latest_eg_lb_037171.doc |url-status=live |archive-url=https://web.archive.org/web/20130116235829/http://export.gov/lebanon/static/Doing%20Business%20in%20Lebanon_Latest_eg_lb_037171.doc |archive-date=16 January 2013 |access-date=17 January 2013 |publisher=Export.gov}}</ref> The 2010 public debt exceeded 150.7% of GDP, ranking fourth highest in the world as a percentage of GDP, though down from 154.8% in 2009.<ref name="cia2">{{Citation |title=Lebanon |date=2023-03-02 |url=https://www.cia.gov/the-world-factbook/countries/lebanon/ |work=The World Factbook |access-date=2023-03-14 |publisher=Central Intelligence Agency |language=en}}</ref> At the end 2008, finance minister [[Mohamad Chatah]] stated that the debt was going to reach $47 billion in that year and would increase to $49 billion if privatization of two telecoms companies did not occur.<ref>{{cite news |last=Bayoumy |first=Yara |date=2 January 2009 |title=RPT-UPDATE 1-Lebanon public debt at $89 bln end-2008-minister |work=Reuters |url=http://in.reuters.com/article/asiaCompanyAndMarkets/idINL217217120090102?pageNumber=1&virtualBrandChannel=0 |url-status=dead |access-date=18 October 2009 |archive-url=https://web.archive.org/web/20201027040534/https://in.reuters.com/article/asiaCompanyAndMarkets/idINL217217120090102?pageNumber=1&virtualBrandChannel=0 |archive-date=27 October 2020}}</ref> The [[Daily Star (Lebanon)|Daily Star]] wrote that exorbitant debt levels have "slowed down the economy and reduced the government's spending on essential development projects".<ref>{{cite news |date=20 May 2004 |title=IMF: Lebanon's debt alarming |work=The Daily Star |publisher=Center for Democracy and the Rule of Law |url=http://www.cggl.org/scripts/new.asp?id=227 |url-status=dead |access-date=18 October 2009 |archive-url=https://web.archive.org/web/20110511081155/http://www.cggl.org/scripts/new.asp?id=227 |archive-date=11 May 2011}}</ref> During the early part of 2020, the [[History of Lebanon#2020 meltdown of central bank|central bank (BdL) defaulted]] on $90 sovereign debt obligations and the government needed recourse to the IMF for a shortfall of $50 billion. On 4 August 2020, the [[2020 Beirut explosion|explosion of 2,750 tons ammonium nitrate]] in a [[Beirut]] port warehouse caused the destruction of the "only large grain silo" in the country,<ref name="silo">{{cite news |title=Exclusive: Lebanon navigates food challenge with no grain silo and few stocks |url=https://www.reuters.com/article/us-lebanon-security-blast-grains-exclusi/exclusive-lebanon-navigates-food-challenge-with-no-grain-silo-and-few-stocks-idUSKCN25317I |publisher=Reuters |date=6 August 2020}}</ref> in addition to more than 200 people killed and several square kilometres of pulverised buildings in the downtown core of the city. By 9 August, President of France [[Emmanuel Macron]] had counted over €250 million of global contributions to the relief effort.<ref name="emcbc">{{cite news |title=Donors pledge $398.7M in aid after Beirut blast but Lebanon corruption concerns persist |url=https://www.cbc.ca/news/world/beirut-explosion-aid-donrs-1.5679851 |agency=Associated Press|publisher=CBC |date=9 August 2020}}</ref> On 10 August, the government of [[Hassan Diab]] resigned.<ref name="bnnp">{{cite news |last1=Fouquet |first1=Helen |title=Lebanese government steps down in the aftermath of protests and Beirut explosion |url=https://nationalpost.com/news/world/lebanese-government-steps-down-in-the-aftermath-of-protests-and-beirut-explosion/ |agency=Bloomberg News |publisher=National Post, a division of Postmedia Network Inc |date=10 August 2020}}</ref> The day before, [[International Monetary Fund|IMF]] director [[Kristalina Georgieva]] had laid down four conditions for the co-operation of her organization:<ref name=bnnp /> *restoring the financial solvency of the state, *cutting losses at state-owned companies, *passing a law to regulate capital outflows and *setting up a social safety net. On 14 August, the [[United Nations Office for the Coordination of Humanitarian Affairs]] (UNOCHA) launched a $565 million appeal for donors of aid to victims of the explosions. The UN effort was to focus on: meals, first aid, shelters, and repair of schools. Some of the money that Macron collected would be used by the UNOCHA.<ref name="emlap">{{cite news |last1=Lederer |first1=Edith M. |title=UN launches $565-million appeal for Beirut explosion victims |url=https://www.theglobeandmail.com/world/article-un-launches-565-million-appeal-for-beirut-explosion-victims/ |agency=Associated Press|work=The Globe and Mail |date=14 August 2020}}</ref> === 2019–present economic crisis === {{Main|COVID-19 recession|Lebanese liquidity crisis}} According to a [[World Bank]] report, Lebanon's economy which was structurally strained before the Syrian shock suffered a real blow as an aftermath of the Syrian crisis which brought around 1.5 million Syrian refugees into Lebanon.<ref>{{Cite web|title=Overview|url=https://www.worldbank.org/en/country/lebanon/overview|access-date=2020-09-19|publisher=World Bank|language=en}}</ref> The GDP growth rate declined by around 1 percent in 2018.<ref>{{Cite web|title=GDP growth (annual %) - Lebanon {{!}} Data|url=https://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG?locations=LB|access-date=2021-12-21|website=data.worldbank.org}}</ref> In August 2019, the [[USD]] parallel exchange rate started diverging from the official exchange rate; the official exchange rate for the USD had been [[Lebanese pound|£L]]1,507.5 since 1997, while the parallel exchange rate was £L1,600 in the fall of 2019 and would increase to around £L4,200 in May 2020.<ref name=":0">{{Cite web|url=https://lirarate.com/|title=Lira Rate | USD to LBP in Black Market | Dollar to LBP|website=Lira Rate}}</ref><ref>{{Cite web |url=https://www.bdl.gov.lb/statistics/table.php?name=t5282usd |title=Exchange Rates |access-date=18 April 2020 |archive-date=10 July 2020 |archive-url=https://web.archive.org/web/20200710212215/https://www.bdl.gov.lb/statistics/table.php?name=t5282usd |url-status=dead }}</ref> The USD parallel exchange rate is increasing because of the dollar shortage in Lebanon.<ref>{{Cite web|url=https://www.aljazeera.com/news/2019/10/lebanese-petrol-stations-shudder-halt-nationwide-strike-191011171626159.html|title=Lebanese petrol stations shudder to a halt amid nationwide strike|publisher=Al Jazeera|date=11 October 2019|author=Timour Azhari}}</ref> In a bid to lower the dollar price, the central bank made an agreement with the licensed exchangers to make the official rates on offer at £L3,860/3,910.<ref name=":1">{{cite web |url=https://www.dailystar.com.lb/News/Lebanon-News/2020/Jun-19/507724-lebanon-central-bank-aims-to-bring-dollar-price-down-progressively-salameh.ashx |title=Lebanon Central Bank aims to bring dollar price down progressively: Salameh |website=www.dailystar.com.lb |access-date=25 June 2020 |archive-date=29 November 2020 |archive-url=https://web.archive.org/web/20201129021858/https://www.dailystar.com.lb//News/Lebanon-News/2020/Jun-19/507724-lebanon-central-bank-aims-to-bring-dollar-price-down-progressively-salameh.ashx |url-status=dead }}</ref> However, despite the central bank's efforts, on 23 June 2020, the black market dollar reached a staggering rate of £L 6,075 devaluing the Lebanese pound by 75%.<ref>{{cite web|url=https://www.dailystar.com.lb/News/Lebanon-News/2020/Jun-23/507923-lebanese-pound-plunges-to-record-low-on-black-market.ashx|title=Lebanese pound plunges to record low on black market |work=The Daily Star}}</ref> This dollar shortage also caused 785 restaurants and cafes to close between September 2019 and February 2020 and caused 25,000 employees to lose their jobs.<ref>{{Cite web|url=https://english.aawsat.com/home/article/2140916/lebanon-785-restaurants-cafes-closed-25000-employees-laid|title=Lebanon: 785 Restaurants, Cafes Closed, 25,000 Employees Laid Off|website=Asharq Al-Awsat}}</ref><ref>{{Cite web|url=https://www.aljazeera.com/news/2019/11/dollar-shortage-lebanons-economic-crisis-191125160725930.html|title=US dollar shortage and Lebanon's economic crisis|publisher=Al Jazeera|date=25 November 2019|author=Zeina Khodr}}</ref> This economic crisis made Lebanon's [[gross domestic product]] fall to about $44 billion, which was about $55 billion the year before.<ref>{{Cite web|url=https://www.dailystar.com.lb/Business/Local/2020/Mar-11/502598-lebanons-gdp-declines-to-44-billion-from-55-billion.ashx|title=Lebanon's GDP declines to $44 billion from $55 billion|work=The Daily Star|date=11 March 2020|access-date=20 April 2020|archive-date=8 July 2020|archive-url=https://web.archive.org/web/20200708053423/https://www.dailystar.com.lb//Business/Local/2020/Mar-11/502598-lebanons-gdp-declines-to-44-billion-from-55-billion.ashx|url-status=dead}}</ref> The crisis became worse when the [[COVID-19 pandemic]] affected the Lebanese economy.<ref>{{Cite web|url=https://alkhaleejtoday.co/international/94770/COVID-19-Lebanon%E2%80%99s-economic-crisis-explodes.html|title=404. That's an error.|website=AlKhaleej Today|date=December 2020 }}</ref> In 2020, the country defaulted for the first time on $30 billion in bonds and tried to seek help from the IMF but the negotiations never reached fruition.<ref name=":2">{{Cite news|title=For the first time, Lebanon defaults on its debts|newspaper=The Economist|url=https://www.economist.com/middle-east-and-africa/2020/03/12/for-the-first-time-lebanon-defaults-on-its-debts|access-date=2020-09-19|issn=0013-0613}}</ref><ref>{{Cite web|title=Default Showdown Pits Creditors Against Lebanon Seeking Relief|url=https://www.bloombergquint.com/business/debt-default-showdown-looms-as-lebanon-freezes-eurobond-payment|access-date=2020-09-19|website=BloombergQuint|date=8 March 2020 |language=en}}</ref> The liquidity crisis also lead to a restriction on the withdrawals from US dollar bank accounts.<ref>{{Cite web|title=Lebanon's Financial Crisis: Where Did the Money Go?|url=http://lcps-lebanon.org/agendaArticle.php?id=158|access-date=2020-10-04|website=lcps-lebanon.org}}</ref> Depositors needed to preserve the value of their savings, especially following press reports about possible haircuts and restructuring of the banking sector. They therefore turned to buying real estate.<ref name="businessnewsfay">{{Cite news|url=http://www.businessnews.com.lb/cms/Story/StoryDetails/8653/Solidere-share-price-doubles-compared-with-October-2019|title=Solidere share price doubles compared with October 2019|last=Nakhoul|first=Shikrallah|date=1 June 2020|work=businessnews.com.lb|accessdate=19 July 2020}}</ref> For example, revenues from land sales of the major real estate developer, [[Solidere]] company, soared from nearly $1.3 million to $234.5 million.<ref name="businessnewshan">{{Cite news|url=http://www.businessnews.com.lb/cms/Story/StoryDetails.aspx?ItemID=8690|title=Solidere posts first net profit since 2016|last=Khalaf|first=Gisele|date=1 July 2020|work=businessnews.com.lb|accessdate=19 July 2020}}</ref> Also, these depositors turned to buying shares in Solidere company, which lead to a rise of 500% in its price between the start of the liquidity crisis and April 2021.<ref name="alarabiya">{{Cite news|url=https://www.alarabiya.net/aswaq/special-stories/2021/03/18/لبنان-سهم-سوليدير-العقارية-في-لبنان-يرتفع-لأعلى-مستوياته-منذ-2009|title=سهم سوليدير اللبنانية يرتفع لأعلى مستوياته منذ 2009|date=18 March 2021|work=[[Al Arabiya]]|accessdate=7 April 2021}}</ref> The already battered economy of Lebanon suffered fresh blow with the port blast on 4 August 2020. Economists have claimed that the blasts could result in the contraction of Beirut's GDP by around 20–25% for the year. The current figure surpasses IMF's last forecast of 12% crash in GDP because of the ongoing and increasing economic and political crisis in Lebanon.<ref name=":3">{{cite web|url=https://www.reuters.com/article/us-lebanon-security-blast-economy/lebanons-battered-economy-dealt-fresh-blow-after-port-blast-hits-achilles-heel-idUSKCN2532SH|title=Lebanon's battered economy dealt fresh blow after port blast hits 'Achilles heel'|access-date=7 August 2020|publisher=Reuters|author=Suleiman al-Khalidi |date=7 August 2020}}</ref> In March 2021, Lebanon approved an emergency assistance package from the World Bank worth $246 million in order to support struggling families and strengthen the social safety and try to face the economic crisis.<ref>{{Cite web|date=2021-03-13|title=Lebanon approves World Bank rescue plan for needy families|url=https://arab.news/8k8zu|access-date=2021-03-14|website=Arab News|language=en}}</ref> On March 16, as the Lebanese pound jumped on the black market from £L13,000 to £L15,000 against the US dollar, protesters took to the streets, grocery stores closed and bakeries threatened to close.<ref>{{Cite web|date=2021-03-16|title=Lebanese erupt in rage as currency hits new low|url=https://arab.news/529g7|access-date=2021-03-17|website=Arab News|language=en}}</ref> After the meeting of the President Aoun and Prime Minister-designate Saad Hariri on March 18, the Lebanese pound dropped from £L15,000 against the dollar on the black market to £L12,500.<ref>{{Cite web|first=Souad|last=Lazkani|date=2021-03-18|title=The Lebanese Lira Is Gaining Value Against The Dollar Ahead Of Aoun-Hariri Meeting|url=https://www.the961.com/lebanese-lira-rose-aoun-hariri-meeting/|access-date=2021-03-19|website=The961|language=en-US}}</ref> As of 2023, Lebanon is considered by some to have become a [[failed state]], suffering from chronic poverty, economic mismanagement and a banking collapse.<ref>{{cite web |url=https://www.pbs.org/newshour/show/lebanon-struggles-to-emerge-from-financial-crisis-and-government-corruption |website=pbs.org |access-date=27 February 2024 |title=Lebanon struggles to emerge from financial crisis and government corruption |date=3 July 2023 }}</ref> Lebanon’s poverty rate have surged from 20 percent to over 80 percent after 2019, driven by economic crises worsened by the [[2020 Beirut explosion]] and the [[COVID-19 pandemic]].<ref name=":7">{{Cite book |last=Deeb |first=Lara |title=Love across difference: mixed marriage in Lebanon |date=2024 |publisher=Stanford University Press |isbn=978-1-5036-4076-4 |location=Stanford, CA}}</ref> These crises have intensified resource shortages and deepened reliance on sectarian patronage systems that have further entrenched societal divisions and accompanying political and economic stagnation.<ref name=":7" /> ==== Causes ==== ===== External debt ===== After the civil war, the Lebanese government resorted to massive borrowing to finance its post-war restructuring. The yearly growth of gross debt between 1993 and 1995 was 123 percent and between 1995 and 2000 was 171 percent.<ref>{{Cite web|last=Chbeir|first=Rouba|date=18 May 2019|title=A Historical Analysis of Lebanon's Public Debt|url=https://blog.blominvestbank.com/wp-content/uploads/2019/05/A-Historical-Analysis-of-Lebanon’s-Public-Debt.pdf}}</ref> Between 2005 and 2018, the yearly growth of debt has averaged around 22 percent, and in comparison the GDP growth rate for the same period has been in single digits with an exception of 2009. This high debt has caused Lebanon to spend a big chunk of its revenues in debt servicing; on average, close to 45 percent is spent by the government as interest payments. In 1996, interest payments made up almost 68 percent of that year's budget deficit.<ref>{{Cite web|last=Salti|first=Nisreen|title=No Country for Poor Men: How Lebanon's Debt Has Exacerbated Inequality|url=https://carnegie-mec.org/2019/09/17/no-country-for-poor-men-how-lebanon-s-debt-has-exacerbated-inequality-pub-79852|access-date=2020-09-19|website=Carnegie Middle East Center|language=en}}</ref> With debt piling up and growth being minuscule, Lebanon's debt to GDP ratio reached 178 percent by the end of 2019, which makes it the third most indebted country after [[Greece]] and [[Japan]].<ref>{{Cite web|title=Lebanon's Deepening Economic Crisis Laid Bare by Beirut Blast|date=13 August 2020 |url=https://www.bloombergquint.com/businessweek/beirut-explosion-lebanon-was-already-in-an-economic-crisis-before-the-blast|access-date=2020-09-19|publisher=BloombergQuint|language=en}}</ref> In 2020, Beirut defaulted on a $1.2 billion [[Eurobond (external bond)|external bond]], the first sovereign default in its history. The nation is currently in discussions with a group of creditors about a possible restructuring of a defaulted Eurobond.<ref>{{Cite news|title=Lebanon Will Default on Foreign Debt Payment Amid Deepening Economic Crisis|newspaper=The New York Times|date=7 March 2020|url=https://www.nytimes.com/2020/03/07/world/middleeast/lebanon-debt-financial-crisis.html|last1=Yee|first1=Vivian}}, New York Times</ref><ref>{{Cite web|title=Distressed-Debt Funds Team Up as Lebanon Bonds Plunge to Records|website=[[Bloomberg News]] |url=https://www.bloomberg.com/news/articles/2020-02-12/lebanon-s-bonds-plunge-to-record-lows-as-greylock-forms-group, }}Bloomberg News</ref> A successful restructuring would allow the country to again access external credit markets. ===== Currency crisis ===== Lebanon's national currency, the Lebanese pound is pegged to the US dollar at £L15,000 to US$1. This fixed rate has been unstable due to the depreciating value of the pound in the black market. According to reports, the pound was trading at £L8,100 to US$1 in 2019 on the black market. The causes of the pound's depreciation can be traced back to the economy's dependence on imports. Lebanon in 2018 imported US$20 bn worth of goods and exported goods worth only US$3 bn.<ref>{{Cite web|title=Foreign trade figures of Lebanon – Economic and Political Overview – Nordea Trade Portal|url=https://www.nordeatrade.com/en/explore-new-market/lebanon/trade-profile|access-date=2020-09-19|website=www.nordeatrade.com|archive-date=27 October 2020|archive-url=https://web.archive.org/web/20201027082042/https://www.nordeatrade.com/en/explore-new-market/lebanon/trade-profile|url-status=dead}}</ref><ref name=":0" /> This [[trade deficit]] also widened as the remittances share, which was around 24 percent in 2008 declined to nearly 12 percent in 2018. This coupled with geopolitical tensions of the region, caused the Pound-Dollar peg rate to wither. As a response, the [[central bank]] resorted to more borrowing and also issued a directive that required all money transfer offices to cash out transfers in the local currency, further exacerbating the dollar crunch.<ref>{{Cite web|last=Meuse|first=Alison Tahmizian|date=2019-10-27|title=Lebanon's shuttered banks bracing for dollar run|url=https://asiatimes.com/2019/10/lebanons-shuttered-banks-bracing-for-dollar-run/|access-date=2020-09-19|website=Asia Times|language=en-US}}</ref><ref name=":4">{{Cite news|date=2020-08-05|title=Lebanon: Why the country is in crisis|language=en-GB|work=BBC News|url=https://www.bbc.com/news/world-middle-east-53390108|access-date=2020-09-19}}</ref><ref name=":1" /> ===== Corruption and political instability ===== After [[2020 Beirut explosion|a devastating explosion in Beirut]] on 4 August 2020 that killed at least 200 people, the government, headed by Prime Minister [[Hassan Diab]], announced that his government was stepping down. In his speech, Mr. Diab said that corruption cases were widespread in the country's political and administrative landscape; other calamities hiding in many minds and warehouses, and which pose a great threat, are protected by the class that controls the fate of the country.<ref name=":4" /><ref name=":3" /> According to reports, the financial troubles and political inaction had caused growing anger and frustration among people who began protesting in October last year. Protesters demanded an end to corruption and the resignation of political leaders including the then Prime Minister [[Saad Hariri|Saad al-Hariri]]. This year, the newly formed government under Diab faced the same accusations of corruption.<ref name=":5">{{Cite web|date=2020-08-05|title=A tragedy was already unfolding in Lebanon before the explosion|url=https://www.abc.net.au/news/2020-08-06/lebanon-in-economic-political-crisis-before-beirut-explosion/12525920|access-date=2020-09-19|website=www.abc.net.au|language=en-AU}}</ref> In November 2019, The central bank of Lebanon was accused of running a Ponzi scheme as it relied on fresh borrowing to service its debt. The bank denied the allegations stating that its action was in par with the 1963 Code of Money and Credit.<ref>{{Cite news|last=Arnold|first=Tom|date=2019-11-15|title=In Lebanon, a renowned central bank governor faces attack|language=en|work=Reuters|url=https://www.reuters.com/article/us-lebanon-protests-cenbank-idUSKBN1XP1FL|access-date=2020-09-19}}</ref> Amidst the failing banking system, banks resorted to putting informal curbs on dollar withdrawals and international transfers, stirring mass protests and police violence.<ref>{{Cite web|date=2020-01-16|title=Curbs on withdrawals by banks trigger protests in Lebanon|url=https://peoplesdispatch.org/2020/01/16/curbs-on-withdrawals-by-banks-trigger-protests-in-lebanon/|access-date=2020-09-19|website=Peoples Dispatch|language=en-US}}</ref> The pandemic brought the protests to a halt for some time but the port explosion in Beirut once again brought people to the streets, who, as reports state, have lost faith in the political elite.<ref name=":4" /> Some estimates state that half of Lebanon's population is living near or [[Poverty in Lebanon|below the poverty line]] and thousands of people have lost their jobs. There have been incessant power cuts and some residents have been calling the blackouts worse than those witnessed in the 1975–1990 civil war.<ref name=":5" /> == Trade == [[File:2006Lebanese exports.PNG|thumb|right|280px|Lebanese exports in 2006]] [[File:Lebanon trade 2017.png|thumb|center|upright=2.25|External trade (USD, million)<ref name="MoE – imports" /><ref name="MoE – exports" />]] Lebanon's trade balance is structurally negative. In 2017, the trade deficit reached $20.3 billion. The country imported $23.1 billion<ref name="MoE – imports">{{cite web |url=https://www.economy.gov.lb/media/11172/imports-value-2000-2017.pdf |title=total Lebanese imports(2000–2017) by value |access-date=10 February 2019 |publisher=Ministry of economy}}</ref> worth of goods and services, and exported $2.8 billion.<ref name="MoE – exports">{{cite web |url=https://www.economy.gov.lb/media/11171/exports-value-2000-2017.pdf |title=total Lebanese exports (2000–2017) by value |access-date=10 February 2019}}</ref> Lebanon has a competitive and [[free market]] regime and a strong [[laissez-faire]] commercial tradition. The Lebanese economy is service-oriented; main growth sectors include banking and tourism. There are no restrictions on foreign exchange or capital movement.{{Citation needed|date=October 2022}} === Food security === Food accounted for 18% of the dollar value of the imports to Lebanon in 2018, according to [[World Bank]] statistics.<ref name="saem">{{cite news |last1=Abou |first1=Souhad |title=Lebanon needs to lower its import dependency |url=https://www.executive-magazine.com/agriculture/lebanon-needs-to-lower-its-import-dependency |publisher=Executive Magazine |date=11 April 2020}}</ref> Wheat and livestock are two foodstuffs for which Lebanon is import-dependent.<ref name=saem /> Around 90 percent of imported wheat is sourced from [[Ukraine]] and [[Russia]].<ref name=saem /> The wheat reserves of Lebanon are kept in silos at the Port of Beirut and cover about three months of consumption.<ref name=saem /> In 2019, domestic wheat production measured 130,000 tons, while wheat imports measured 570,000 tons.<ref name=saem /> The [[food security]] of Lebanon is a subject of debate. On the one hand, administrators of the [[UNESCWA]] used the [[World Food Programme]] in May 2016 to sell the story that the country imports up to 80% of its needs.<ref name="unsr">{{cite book |last1=Halabi |first1=Sami |last2=Ghanem |first2=Nizar |last3=Ghattas |first3=Hala |title=Strategic Review of Food and Nutrition Security in Lebanon |date=May 2016 |url=https://docs.wfp.org/api/documents/WFP-0000019217/download/ |publisher=UNESCWA |access-date=11 August 2020 |archive-date=20 April 2020 |archive-url=https://web.archive.org/web/20200420085132/https://docs.wfp.org/api/documents/WFP-0000019217/download/ |url-status=dead }}</ref> On the other hand, domestic audiences are told that the country is almost self-sufficient in food:<ref name="nmsal">{{cite news |last1=Rahhal |first1=Nabila |title=Lebanon: land of plenty? |url=https://www.executive-magazine.com/special-report/16479 |agency=NEWSMEDIA SAL |publisher=Executive Magazine |date=4 May 2016}}</ref><ref name="kanj">{{cite news |last1=Hamade |first1=Kanj |title=Lebanon ' s Agriculture: Dynamics of Contraction in the Absence of Public Vision and Policies |url=http://www.annd.org/data/file/files/13%20Lebanon%20.pdf |publisher=Arab NGO Network for Development |date=n.d.}}</ref> {{blockquote|Overall, Lebanon is self-sufficient in the production of fruits, and almost self-sufficient with regards to the production of vegetables. Self-sufficiency indexes reach up to 200% for bananas, citrus, and apples. However, Lebanon has a significant deficit in the production of cereals, livestock, and dairy products. Lebanon had a deficit in cereal production at an average of 800 thousand tons per year prior to the Syrian Crisis. Half of the quantity of imported cereals is soft wheat. Lebanon implements a wheat subsidies instrument, through the [[Ministry of Economy and Trade (Lebanon)|Ministry of Economy and Trade]] (MET)... The implementation of wheat subsidies is left to a yearly decision undertaken by the [[Council of Ministers of Lebanon|Council of Ministers]]... MET also implements a bread price control, with prices of bread fixed at 1 USD per 900 grams of standard [[Lebanese bread]]. Through this policy, MET supports bakeries and mills by providing in-kind wheat flour deliveries to reduce production cost and ensure mills and bakeries still have a profit margin on the standard 900 gram bread package.}} == Corruption == {{Main|Corruption in Lebanon}} According to NGO [[Transparency International]] Lebanon ranks 138th out of 180 countries surveyed in the [[Corruption Perceptions Index]]. A poll<ref name="TI poll">{{cite web |url=https://issuu.com/transparencyinternational/docs/2016_gcb_mena_en?e=2496456/35314511 |title=PEOPLE AND CORRUPTION: MIDDLE EAST & NORTH AFRICA SURVEY 2016 |date=3 February 2019 |publisher=Transparency international |pages=9–13}}</ref> conducted by Transparency International in 2016 indicated that 92% of Lebanese thought that corruption had increased that year. Additionally, 67% of the respondents indicated that they believed that the majority of the political and economical elites were corrupted, and 76% indicated that the government was doing poorly when it came to fighting corruption.<ref name="TI poll" /> As of July 2020, [[Riad Salamé]], governor of [[Banque du Liban]] (the country's central bank) since 1993, has had his assets frozen, and is facing an October hearing accused of the embezzlement of central bank assets, and the mismanagement of public funds.<ref name="OCCRP">{{cite news |last1=Ameen |first1=Hazem |last2=Ibrahim |first2=Alia |title=Lebanon's Offshore Governor |url=https://www.occrp.org/en/investigations/lebanons-offshore-governor |access-date=12 August 2020 |work=OCCRP |date=11 August 2020}}</ref><ref>{{Cite web|url=https://www.reuters.com/article/lebanon-crisis-cenbank-salameh-idUSL5N2ER3ZH|title=Lebanese judge orders 'protective freeze' on assets of c.bank governor|date=20 July 2020|publisher=Reuters}}</ref> The already suffering country was struck by a [[2020 Beirut explosion|huge explosion]] on 4 August 2020. The explosion devastated the Port of Beirut and destroyed many houses, leaving almost 300,000 people homeless. This explosion has led to the demolition of the country's main harbor that was used to import food.<ref>{{Cite web|first1=Havovi|last1=Cooper|first2=Mark|last2=Abadi|title=Lebanon was already in financial crisis before the explosion in Beirut – and now experts are predicting devastating consequences|url=https://www.businessinsider.com/beirut-lebanon-explosion-financial-crisis-economy-2020-8|access-date=2020-10-01|website=Business Insider}}</ref> == Inequality == The top 1% richest adults receive approximately a quarter of the total national income, placing Lebanon among the most unequal countries in the world.<ref name="wid.world">{{Cite web|url=https://wid.world/share/|title=Share – WID – World Inequality Database|website=WID – World Inequality Database|language=en-US|access-date=2019-10-26}}</ref> The bottom 50% of the population is left with 10% of total national income.<ref name="wid.world" /> Lebanon is characterized by a dual social structure, with an extremely rich group at the top, whose income levels are comparable to their counterparts in high-income countries, and a much poorer mass of the population, as in many developing countries. This polarized structure reflects the absence of a broad "middle class": While the middle 40% receives more than the share accruing to the top 10% in Western Europe, and a bit less in the US, it is left with far less income than the top 10% in Lebanon (between 20 and 30 p.p less). The richest captured most of the income growth since 2005: The top 10% saw its income increase by 5 to 15%, while the bottom 50% saw it decrease by 15% and the poorest 10% by a quarter. Lebanese billionaires' wealth represents on average, between 2005 and 2016, 20% of national income as opposed to 2% in China, 5% in France, and 10% in the US. == Fiscal haven == In 2018, Lebanon ranked 11th on the [[Financial Secrecy Index]]. Lebanon has a strong history of [[Bank secrecy|banking secrecy]] but has taken steps to fight [[money laundering]] and [[tax evasion]] in recent years. As of January 2019, banking secrecy applies to Lebanese nationals living in Lebanon but is not applicable to US citizens and US fiscal residents since the [[Foreign Account Tax Compliance Act|FATCA]] agreement was introduced. Lebanon is part of the [[Global Forum on Transparency and Exchange of Information for Tax Purposes]] and has signed an agreement to exchange fiscal data with other countries, but as of January 2019, it is not compliant with certain provisions of the treaty. On the 24th of April 2025, a bill to amend the banking secrecy law was passed, allowing all regulatory bodies and banking supervisory to request access to all information.<ref>https://today.lorientlejour.com/article/1457278/parliament-approves-banking-secrecy-bill.html</ref> [[Ali Hassan Khalil]], Finance Minister, confirmed that 2019's draft budget showed a deficit of less than 9% of GDP compared to 11.2% in 2018. Khalil also claimed that the economic growth forecast of 1.5 percent could go up to 2% in 2019.<ref>{{cite news|url=https://www.reuters.com/article/us-lebanon-economy-budget-exclusive/exclusive-lebanese-draft-budget-reduces-deficit-to-below-9-percent-of-gdp-finance-minister-idUSKCN1RT29Z|title=Exclusive: Lebanese draft budget reduces deficit to below 9 percent of GDP – finance minister|access-date=17 April 2019|work=Reuters}}</ref> == Foreign investment == There are few restrictions on foreign investment, barring [[Israel]]i citizens and entities. There are no country-wide U.S. trade sanctions against Lebanon, although [[Hezbollah]] and individuals associated with it have been targeted by the American government. Foreign ownership of real estate is legal under certain conditions.<ref>{{cite web|url=https://investinlebanon.gov.lb/Content/uploads/Legal_Framework_for_Ownership_of_Land_in_Lebanon.pdf|title=Legal Framework for Ownership of Land in Lebanon|website=Invest in Lebanon|access-date=21 June 2023|archive-date=23 January 2019|archive-url=https://web.archive.org/web/20190123223743/https://investinlebanon.gov.lb/Content/uploads/Legal_Framework_for_Ownership_of_Land_in_Lebanon.pdf|url-status=dead}}</ref> According to a report by ''[[The Wall Street Journal]]'', "Lebanon has one of the world's highest public debt-to-gross domestic product ratios, rising to over 150% as it takes on more debt to plug budget holes." In January 2019, in a move to boost the economy of Lebanon and help the country overcome its debts, Qatar pledged to buy $500 million's worth of government bonds.<ref>{{cite news|url=https://www.wsj.com/articles/qatar-muscles-in-on-saudi-arabia-with-lebanon-investment-11548077269|title=Qatar Muscles in on Saudi Arabia With Lebanon Investment|work=The Wall Street Journal|date=21 January 2019|access-date=21 January 2019}}</ref> In June 2019, [[Bloomberg News|Bloomberg]] reported that Qatar had bought some of the bonds and planned to complete the rest of the investment soon.<ref>{{cite news|url=https://www.bloomberg.com/news/articles/2019-06-27/qatar-says-it-bought-some-lebanese-bonds-in-500-million-pledge|title=Qatar Starts to Make Good on $500 Million Bond Pledge to Lebanon|newspaper=Bloomberg|date=27 June 2019 |access-date=27 June 2019}}</ref> === Remittances === Lebanon benefits from its large, cohesive, and entrepreneurial [[Lebanese diaspora|diaspora]].<ref>Global Investment House.[https://web.archive.org/web/20080611182611/http://www.iom.int/jahia/Jahia/pid/426 Lebanon Economic and Strategic Outlook (Nov 2008)] Retrieved 28 June 2009.</ref> Over the course of time, emigration has yielded Lebanese "commercial networks" throughout the world.<ref>Background Note: Lebanon [https://web.archive.org/web/20051016135629/http://www.washingtoninstitute.org/documents/41e1aa0d7d676.pdf "www.washingtoninstitute.org"]. Retrieved 3 December 2006.</ref> Consequently, in 2009, [[remittances]] from Lebanese abroad to family members within the country totaled $8.2 billion<ref>[[International Organization for Migration]].[https://web.archive.org/web/20080611182611/http://www.iom.int/jahia/Jahia/pid/426 "Lebanon – Facts and Figures"] Retrieved 13 June 2009.</ref> and accounted for one fifth of the country's economy.<ref>[[Reuters]].[https://www.reuters.com/article/us-lebanon-election-economy-sb-idUSTRE5570SJ20090608 "FACTBOX: Facts on Lebanon's economy"] Retrieved 13 June 2009.</ref> Nassib Ghobril, the head of research and analysis for [[Byblos Bank]], calculates that Lebanese abroad supply Lebanon with about $1,400 per capita every year.<ref>{{cite news |author=Robert F. Worth |date=24 December 2007 |title=Home on Holiday, the Lebanese Say, What Turmoil? |url=https://www.nytimes.com/2007/12/24/world/middleeast/24lebanon.html?_r=0 |access-date=28 March 2024 |work=[[The New York Times]]}}</ref> == Investment == The stock [[market capitalization]] of listed companies in Lebanon was valued at $9.6 billion in January 2019, down from $11.5 billion in January 2018<ref>{{cite web|url=http://www.bse.com.lb/MarketCapitalization/tabid/114/MarketType/C/Default.aspx|title=Market Capitalization|publisher=Beirut Stock Exchange|access-date=23 January 2019}}</ref> Lebanon was unable to attract significant foreign aid to help it rebuild from both the long civil war (1975–89) and the [[1982 Lebanon War|Israeli occupation of the south]] (1978–2000). In addition, the delicate social balance and the near- dissolution of central government institutions during the civil war handicapped the state as it sought to capture revenues to fund the recovery effort. Thus it accumulated significant debt, which by 2001 had reached $28 billion, or nearly 150% of GDP. Economic performance was sluggish in 2000 and 2001 (zero growth in 2000, and estimates between 1.0 and 1.4% in 2001, largely attributed to slight increases in tourism, banking, industry, and construction). Unemployment is estimated at 14% for 2000 and 29% among the 15-24-year age group, with preliminary estimates of further increases in 2001. However, many Lebanese expatriates have been able to return to the country due to the negative financial situations they are facing abroad, due to the global economic crisis. Also, more job opportunities are attracting more Lebanese youths for a chance to return and work in Lebanon, and also a benefit for the Lebanese living in the country, graduating from universities. == Reforms == {{Economy of Lebanon}} Lebanon's current program of reforms focuses on three main pillars: [[File:American-University-Beirut-NW.jpg|thumb|Lebanon has always been under constant political and social challenges because of its location between the east and the west.|190x190px]] * Economic revival and [[sustainable growth]], with the private sector as the engine of growth; * Fiscal consolidation and structural improvement in public sector finances; and * Monetary, financial, and price stability. The government also has maintained a firm commitment to the Lebanese pound, which has been pegged to the dollar since September 1999. In late 2000, the government substantially reduced customs duties, adopted export promotion schemes for agriculture, decreased social security fees and restrictions on investment in real estate by foreigners, and adopted an open-skies policy, with positive effects on trade in 1991. Nonetheless, the relative appreciation of the Lebanese currency has undermined competitiveness, with merchandise exports falling from 23% of GDP in 1989 to 4% in 2000. In 2001, the government turned its focus to fiscal measures, Increasing gasoline taxes, reducing expenditures, and approving a value-added-tax that became effective in February 2002. Slow money growth and [[dollarization]] of deposits have hampered the ability of commercial banks to finance the government, leaving more of the burden to the [[Banque du Liban|central bank]]. This monetization of the fiscal deficit has put enormous pressure on central bank reserves, mitigated only slightly with the issuance of new [[Eurobond (international)|Eurobonds]] over the past 2 years. The central bank has maintained a stable currency by intervening directly in the market, as well as low inflation, and succeeded in maintaining investors' confidence in debt. It has done so at a cost, however, as international reserves declined by $2.4 billion in 2000 and by $1.6 billion in the first half of 2001. For 2002, the government has put primary emphasis on privatization, initially in the telecom sector and electricity, with continued planning for sales of the state airline, Beirut port, and water utilities. The government has pledged to apply the proceeds of sales to reducing the public debt and the budget deficit. In addition, it projects that privatization will bring new savings as government payrolls are pared, interest rates decline, and private sector growth and foreign investment are stimulated. The government also is tackling the daunting task of administrative reform, aiming to bring in qualified technocrats to address ambitious economic programs, and reviewing further savings that can be realized through reforms of the income tax system. The Lebanese Government faces major challenges in order to meet the requirements of a [[fiscal adjustment]] program focusing on tax reforms and modernization, expenditure rationalization, privatization, and improved debt management. [[File:Montagnes Faraya.jpg|thumb|200x200px|[[Faraya]] in Mount Lebanon Governorate. The [[Lebanese economy]] depends on its tourism sector throughout all seasons of the year. Tourists from Europe, GCC, and Arab countries visit Lebanon for various reasons.]] The U.S. enjoys a strong exporter position with Lebanon, generally ranking as Lebanon's fourth-largest source of imported goods. More than 160 offices representing U.S. businesses currently operate in Lebanon. Since the lifting of the passport restriction in 1997 (see below), a number of large U.S. companies have opened branches or regional offices, including [[Microsoft]], [[American Airlines]], [[Coca-Cola]], [[FedEx]], [[United Parcel Service|UPS]], [[General Electric]], [[Parsons Brinckerhoff]], [[Cisco Systems]], [[Eli Lilly and Company|Eli Lilly]], [[Computer Associates]] and [[PepsiCo|Pepsi Cola]]. Mexico has also many enterprises run by ethnic Lebanese, such as [[Carlos Slim]]'s [[Telmex]]. Solidere shares are the most actively traded in the Beirut Stock Exchange. Its share price in the [[Beirut Stock Exchange]] has risen sharply in the last year from around US$5.00 in early 2004 to close at US$17.50 on Friday, 23 December 2005. In 2025, Lebanon amended its banking secrecy laws under pressure from the IMF. The reforms would allow independent auditors access to banking records from the past 10 years in an effort to stop corruption and facilitate a larger restructuring of the Lebanese banking industry.<ref>{{Cite web |date=24 April 2025 |title=Lebanon passes banking secrecy law in third attempt to meet IMF demands |url=https://www.reuters.com/world/middle-east/lebanon-passes-banking-secrecy-law-third-attempt-meet-imf-demands-2025-04-24/ |website=Reuters}}</ref> == Salaries of Lebanese == [[File:Marina-Towers-Beirut.jpg|thumb|200px|Marina Towers, Beirut]] On 15 October 2011, after various unions, including the teachers' union, the general worker's union and others threatened to strike, the minimum wage was raised by 40% (£L200,000 - $133) to £L700,000 ($466). Most unions went ahead with the strike except the general worker's union. * Wages between minimal wage and £L1,200,000 ($800) were increased by £L200,000 ($133) to become £L700,000 (minimal wage) and £L1,400,000 ($933) respectively. * Wages more than £L1,200,000 up to £L1,700,000 ($1,133) were increased by £L300,000 ($200) to become £L1,500,000 ($1,000) and £L2,000,000 ($1,333). * Wages above £L1,800,000 ($1,200) were not increased. The increase in wages was welcomed by most Lebanese but it also sparked criticism by some worker's unions, saying that the increases were not up to expectations, especially that employees earning more than $1200 were not entitled to raises. Others criticized the raises altogether citing that it would burden small business that might end up closing altogether; those critics were mainly opposition politicians. As of 2013 [[World Bank]] analysis of [[Quality Life Index]], it was estimated that: * 15% of the Lebanese people lives below the poverty line ($2,500)<ref>{{cite web|url=http://www.nationmaster.com/country-info/stats/Economy/Population-below-poverty-line |title=Economy > Population below poverty line: Countries Compared |publisher=Nationmaster.com |access-date=20 April 2015}}</ref> * 54% of the Lebanese people lives in the moderate middle class ($9,000) annually. {{increase}} 12% from 1998 * 32% of the Lebanese people lives in the upper middle class ($15,000–27,000) annually. {{decrease}} 19% from 1998 * 7% of the Lebanese people lives in the highest upper class ($30,000 and above) annually {{increase}} 1% from 1998 == Macro-economic trend == The following table shows the main economic indicators in 1986–2020.<ref>{{cite web |url=https://www.imf.org/en/Publications/WEO/weo-database/2021/October/weo-report?c=446,&s=NGDP_RPCH,NGDPD,PPPGDP,NGDPDPC,PPPPC,PCPIPCH,GGXWDG_NGDP,&sy=1980&ey=2026&ssm=0&scsm=1&scc=0&ssd=1&ssc=0&sic=0&sort=country&ds=.&br=1 |title=Report for Selected Countries and Subjects: October 2021 |work=World Economic Outlook Database |publisher=[[International Monetary Fund]] (IMF) |archive-url=https://archive.today/20220323185311/https://www.imf.org/en/Publications/WEO/weo-database/2021/October/weo-report?c=446,&s=NGDP_RPCH,NGDPD,PPPGDP,NGDPDPC,PPPPC,PCPIPCH,GGXWDG_NGDP,&sy=1980&ey=2026&ssm=0&scsm=1&scc=0&ssd=1&ssc=0&sic=0&sort=country&ds=.&br=1 |archive-date=23 March 2022 |url-status=live}}</ref> Inflation below 5% is in green. The annual unemployment rate is extracted from the [[World Bank]], although the [[International Monetary Fund]] find them unreliable.<ref name=":6">{{Cite web |title=Unemployment, total (% of total labor force) (modeled ILO estimate) - Lebanon {{!}} Data |url=https://data.worldbank.org/indicator/SL.UEM.TOTL.ZS?locations=LB |access-date=2022-03-09 |website=data.worldbank.org}}</ref> {| class="wikitable" style="text-align:center;" !Year !GDP <small>(in Bil. US$PPP)</small> !GDP per capita <small>(in US$ PPP)</small> !GDP <small>(in Bil. US$nominal)</small> !GDP per capita <small>(in US$ nominal)</small> !GDP growth <small>(real)</small> !Inflation rate <small>(in Percent)</small> !Unemployment<ref name=":6" /> <small>(in Percent)</small> !Government debt <small>(in % of GDP)</small> |- |1980 |16.4 |6,344.9 |4.0 |1,552.3 |{{Increase}}1.5% |{{IncreaseNegative}}23.9% |n/a |n/a |- |1981 |{{Increase}}18.1 |{{Increase}}6,968.9 |{{Decrease}}3.8 |{{Decrease}}1,480.7 |{{Increase}}0.6% |{{IncreaseNegative}}19.3% |n/a |n/a |- |1982 |{{Decrease}}12.1 |{{Decrease}}4,656.0 |{{Decrease}}2.6 |{{Decrease}}1,005.3 |{{Decrease}}-36.8% |{{IncreaseNegative}}18.6% |n/a |n/a |- |1983 |{{Increase}}15.5 |{{Increase}}5,901.1 |{{Increase}}3.6 |{{Increase}}1,376.8 |{{Increase}}22.7% |{{IncreaseNegative}}7.2% |n/a |n/a |- |1984 |{{Increase}}23.2 |{{Increase}}8,780.0 |{{Increase}}4.3 |{{Increase}}1,617.7 |{{Increase}}44.5% |{{IncreaseNegative}}17.6% |n/a |n/a |- |1985 |{{Increase}}29.7 |{{Increase}}11,199.5 |{{Decrease}}3.6 |{{Decrease}}1,344.1 |{{Increase}}24.3% |{{IncreaseNegative}}69.4% |n/a |n/a |- |1986 |{{Decrease}}28.2 |{{Decrease}}10,615.6 |{{Decrease}}2.8 |{{Decrease}}1,044.3 |{{Decrease}}-6.8% |{{IncreaseNegative}}95.4% |n/a |n/a |- |1987 |{{Increase}}33.8 |{{Increase}}12,664.3 |{{Increase}}3.3 |{{Increase}}1,219.4 |{{Increase}}16.7% |{{IncreaseNegative}}487.2% |n/a |n/a |- |1988 |{{Decrease}}25.1 |{{Decrease}}9,353.8 |{{Steady}}3.3 |{{Decrease}}1,217.4 |{{Decrease}}-28.2% |{{IncreaseNegative}}155.0% |n/a |n/a |- |1989 |{{Decrease}}15.1 |{{Decrease}}5,532.9 |{{Decrease}}2.7 |{{Decrease}}983.3 |{{Decrease}}-42.2% |{{IncreaseNegative}}72.2% |n/a |n/a |- |1990 |{{Decrease}}13.5 |{{Decrease}}4,833.8 |{{Increase}}2.8 |{{Increase}}998.9 |{{Decrease}}-13.4% |{{IncreaseNegative}}68.9% |n/a |n/a |- |1991 |{{Increase}}19.4 |{{Increase}}6,625.7 |{{Increase}}4.4 |{{Increase}}1,502.9 |{{Increase}}38.2% |{{IncreaseNegative}}50.1% |8.4% |n/a |- |1992 |{{Increase}}20.7 |{{Increase}}6,725.8 |{{Increase}}5.5 |{{Increase}}1,778.3 |{{Increase}}4.5% |{{IncreaseNegative}}99.8% |{{Steady}}8.4% |n/a |- |1993 |{{Increase}}22.7 |{{Increase}}6,981.3 |{{Increase}}7.4 |{{Increase}}2,289.6 |{{Increase}}7.0% |{{IncreaseNegative}}24.7% |{{Steady}}8.4% |n/a |- |1994 |{{Increase}}25.0 |{{Increase}}7,347.1 |{{Increase}}9.0 |{{Increase}}2,640.2 |{{Increase}}8.0% |{{IncreaseNegative}}8.2% |{{IncreaseNegative}}8.5% |n/a |- |1995 |{{Increase}}27.2 |{{Increase}}7,705.2 |{{Increase}}11.0 |{{Increase}}3,108.2 |{{Increase}}6.5% |{{IncreaseNegative}}10.3% |{{Steady}}8.5% |n/a |- |1996 |{{Increase}}28.8 |{{Increase}}7,977.1 |{{Increase}}12.8 |{{Increase}}3,550.6 |{{Increase}}4.0% |{{IncreaseNegative}}8.9% |{{Steady}}8.5% |n/a |- |1997 |{{Increase}}32.3 |{{Increase}}8,824.8 |{{Increase}}15.5 |{{Increase}}4,245.1 |{{Increase}}10.2% |{{IncreaseNegative}}7.7% |{{IncreaseNegative}}8.6% |n/a |- |1998 |{{Increase}}33.9 |{{Increase}}9,184.1 |{{Increase}}17.1 |{{Increase}}4,617.2 |{{Increase}}3.9% |{{Increase}}4.5% |{{DecreasePositive}}8.5% |n/a |- |1999 |{{Increase}}34.1 |{{Decrease}}9,105.2 |{{Increase}}17.2 |{{Decrease}}4,580.9 |{{Decrease}}-0.8% |{{Increase}}0.2% |{{DecreasePositive}}8.4% |n/a |- |2000 |{{Increase}}35.3 |{{Increase}}9,181.2 |{{Decrease}}17.0 |{{Decrease}}4,427.2 |{{Increase}}1.1% |{{Increase}}-0.4% |{{DecreasePositive}}8.3% |148.1% |- |2001 |{{Increase}}37.5 |{{Increase}}9,391.9 |{{Increase}}17.4 |{{Decrease}}4,348.5 |{{Increase}}3.9% |{{Increase}}-0.4% |{{DecreasePositive}}8.2% |{{IncreaseNegative}}163.1% |- |2002 |{{Increase}}39.4 |{{Increase}}9,411.7 |{{Increase}}18.8 |{{Increase}}4,502.7 |{{Increase}}3.4% |{{Increase}}1.8% |{{DecreasePositive}}8.1% |{{IncreaseNegative}}163.2% |- |2003 |{{Increase}}40.8 |{{Decrease}}9,302.0 |{{Increase}}19.5 |{{Decrease}}4,438.9 |{{Increase}}1.7% |{{Increase}}1.3% |{{DecreasePositive}}8.0% |{{IncreaseNegative}}171.4% |- |2004 |{{Increase}}45.1 |{{Increase}}9,861.4 |{{Increase}}21.2 |{{Increase}}4,629.2 |{{Increase}}7.5% |{{Increase}}1.7% |{{DecreasePositive}}7.8% |{{DecreasePositive}}169.6% |- |2005 |{{Increase}}46.8 |{{Increase}}9,959.8 |{{Increase}}21.5 |{{Decrease}}4,575.1 |{{Increase}}0.7% |{{Increase}}-1.4% |{{IncreaseNegative}}8.3% |{{IncreaseNegative}}178.9% |- |2006 |{{Increase}}49.0 |{{Increase}}10,292.6 |{{Increase}}22.0 |{{Increase}}4,626.8 |{{Increase}}1.5% |{{Increase}}4.1% |{{IncreaseNegative}}8.7% |{{IncreaseNegative}}183.3% |- |2007 |{{Increase}}55.0 |{{Increase}}11,536.7 |{{Increase}}24.8 |{{Increase}}5,207.8 |{{Increase}}9.3% |{{Increase}}4.1% |{{IncreaseNegative}}9.0% |{{DecreasePositive}}169.3% |- |2008 |{{Increase}}61.1 |{{Increase}}12,831.0 |{{Increase}}29.1 |{{Increase}}6,111.4 |{{Increase}}9.1% |{{IncreaseNegative}}10.7% |{{DecreasePositive}}7.7% |{{DecreasePositive}}161.5% |- |2009 |{{Increase}}67.8 |{{Increase}}14,092.0 |{{Increase}}35.4 |{{Increase}}7,355.0 |{{Increase}}10.2% |{{Increase}}0.8% |{{DecreasePositive}}6.3% |{{DecreasePositive}}144.5% |- |2010 |{{Increase}}74.1 |{{Increase}}14,963.2 |{{Increase}}38.4 |{{Increase}}7,761.6 |{{Increase}}8.0% |{{Increase}}4.0% |{{IncreaseNegative}}6.8% |{{DecreasePositive}}136.8% |- |2011 |{{Increase}}76.3 |{{Decrease}}14,669.4 |{{Increase}}39.9 |{{Decrease}}7,675.3 |{{Increase}}0.9% |{{Increase}}5.0% |{{IncreaseNegative}}7.4% |{{DecreasePositive}}134.4% |- |2012 |{{Increase}}82.1 |{{Increase}}14,819.5 |{{Increase}}44.0 |{{Increase}}7,952.1 |{{Increase}}2.5% |{{IncreaseNegative}}6.6% |{{IncreaseNegative}}7.8% |{{DecreasePositive}}131.0% |- |2013 |{{Increase}}88.6 |{{Increase}}14,976.8 |{{Increase}}46.9 |{{Decrease}}7,933.3 |{{Increase}}3.8% |{{Increase}}4.8% |{{IncreaseNegative}}8.3% |{{IncreaseNegative}}135.3% |- |2014 |{{Increase}}94.1 |{{Increase}}15,029.3 |{{Increase}}48.1 |{{Decrease}}7,687.7 |{{Increase}}2.5% |{{Increase}}1.8% |{{IncreaseNegative}}8.8% |{{IncreaseNegative}}138.3% |- |2015 |{{Increase}}98.7 |{{Increase}}15,105.9 |{{Increase}}50.1 |{{Decrease}}7,663.9 |{{Increase}}0.6% |{{Increase}}-3.7% |{{IncreaseNegative}}9.3% |{{IncreaseNegative}}140.5% |- |2016 |{{Increase}}104.3 |{{Increase}}15,535.4 |{{Increase}}51.4 |{{Decrease}}7,653.7 |{{Increase}}1.6% |{{Increase}}-0.8% |{{IncreaseNegative}}9.8% |{{IncreaseNegative}}145.7% |- |2017 |{{Increase}}109.4 |{{Increase}}16,043.0 |{{Increase}}53.3 |{{Increase}}7,819.6 |{{Increase}}0.8% |{{Increase}}4.5% |{{IncreaseNegative}}10.3% |{{IncreaseNegative}}149.2% |- |2018 |{{Increase}}110.2 |{{Increase}}16,059.2 |{{Increase}}55.3 |{{Increase}}8,058.5 |{{Decrease}}-1.7% |{{Increase}}4.6% |{{IncreaseNegative}}10.8% |{{IncreaseNegative}}154.0% |- |2019 |{{Decrease}}104.0 |{{Decrease}}15,164.0 |{{Decrease}}52.4 |{{Decrease}}7,639.1 |{{Decrease}}-7.3% |{{Increase}}2.9% |{{IncreaseNegative}}11.4% |{{IncreaseNegative}}171.1% |- |2020 |{{Decrease}}78.9 |{{Decrease}}11,561.1 |{{Decrease}}19.0 |{{Decrease}}2,784.8 |{{Decrease}}-25.0% |{{IncreaseNegative}}84.9% |{{IncreaseNegative}}13.3% |{{DecreasePositive}}150.4% |} == FATF analysis of Lebanon == In October 2024, the [[Financial Action Task Force]] (FATF) placed Lebanon on its "grey list," designating it as a jurisdiction under increased monitoring due to strategic deficiencies in countering money laundering and terrorist financing.<ref name=":8">{{Cite news |date=2024-10-25 |title=Lebanon placed on global money-laundering ‘grey list’ |url=https://www.ft.com/content/9b721d62-cef4-42b0-b80e-50b1683a68a6?utm_source=chatgpt.com |access-date=2025-03-30 |work=Financial Times}}</ref><ref>{{Cite web |last=john.crowley@ft.com |last2=Mitchell |first2=Jason |date=2024-11-28 |title=Lebanon at risk of FATF blacklisting |url=https://www.bankingriskandregulation.com/lebanon-at-risk-of-fatf-blacklisting/?utm_source=chatgpt.com |access-date=2025-03-30 |website=Banking Risk and Regulation |language=en-GB}}</ref><ref>{{Cite web |title=Lebanon added to money laundering ‘grey list’ |url=https://www.aljazeera.com/news/2024/10/25/lebanon-added-to-money-laundering-grey-list?utm_source=chatgpt.com |access-date=2025-03-30 |website=Al Jazeera |language=en}}</ref> === Background === Lebanon has faced a severe economic crisis since 2019, characterized by a collapsing financial system, sovereign default, and escalating public debt. The situation was exacerbated by the COVID-19 pandemic and the 2020 Beirut port explosion, leading to widespread poverty and infrastructure damage. In March 2025, the World Bank estimated that Lebanon's recovery and reconstruction needs amount to approximately $11 billion. === FATF Grey Listing === The FATF's decision to grey-list Lebanon was influenced by several factors:<ref>{{Cite news |date=2024 |title=Watchdog FATF places Lebanon on financial crime watchlist |url=https://www.reuters.com/world/middle-east/lebanon-grey-listed-by-financial-watchdog-fatf-two-sources-say-2024-10-25/?utm_source=chatgpt.com}}</ref><ref name=":8" /> * '''Ineffective Judiciary''': Concerns over the independence and efficiency of Lebanon's judicial system in prosecuting financial crimes. * '''Cash-Based Economy''': Following the collapse of its banking sector in 2019, Lebanon's increased reliance on cash transactions raised alarms about illicit financial flows.<ref name=":8" /> * '''Terrorist Financing Risks''': The FATF highlighted that Lebanese authorities did not adequately address risks stemming from the activities of local paramilitary organizations.<ref name=":8" /> === Implications === Being on the grey list subjects Lebanon to enhanced monitoring and may deter foreign investment, complicate remittances, and increase compliance costs for its financial institutions. The designation underscores the urgent need for comprehensive reforms to strengthen Lebanon's anti-money laundering and counter-terrorist financing (AML/CFT) framework.<ref>{{Cite web |title=Mutual Evaluation of Lebanon |url=https://www.fatf-gafi.org/en/publications/Mutualevaluations/Mutualevaluationoflebanon.html?utm_source=chatgpt.com |access-date=2025-03-30 |website=www.fatf-gafi.org}}</ref><ref name=":8" /> === Government Response === In response to the grey listing, Lebanese authorities have committed to implementing a detailed two-year action plan, concluding at the end of 2026, to address the identified deficiencies and facilitate reassessment of Lebanon's status by the FATF.<ref>{{Cite web |last=Monitor |first=Euro-Med Human Rights |title=Negligence: One of the Causes that led to Lebanon being placed on the list of "Jurisdictions under Increased Monitoring – Grey List" by the Financial Action Task Force (FATF) |url=https://euromedmonitor.org/en/article/6604/Negligence:-One-of-the-Causes-that-led-to-Lebanon-being-placed-on-the-list-of-%E2%80%9CJurisdictions-under-Increased-Monitoring-%E2%80%93-Grey-List%E2%80%9D-by-the-Financial-Action-Task-Force-(FATF)?utm_source=chatgpt.com |access-date=2025-03-30 |website=Euro-Med Human Rights Monitor |language=en-US}}</ref> == 2025 government establishment == The European Union has stipulated that Lebanon must implement significant financial reforms and secure an agreement with the International Monetary Fund (IMF) before it can receive the remaining €500 million of a previously pledged €1 billion aid package. This condition was emphasized by EU Commissioner for the Mediterranean, Dubravka Suica, during her recent visit to Lebanon, where she highlighted the necessity of restructuring Lebanon's banking sector. Despite a draft agreement with the IMF in 2022, Lebanon has yet to enact the required reforms to access the associated funding. The newly formed government, led by Finance Minister Yassine Jaber, has expressed a renewed commitment to economic reform and plans to engage with the IMF, with a delegation expected to visit in March to discuss the government's [[2025 Lebnese bank reformation|reform]] agenda.<ref>{{Cite news |date=2025 |title=No EU aid for Lebanon without reform, IMF deal |url=https://www.newarab.com/news/no-eu-aid-lebanon-without-reform-imf-deal}}</ref> == 2025 IMF–World Bank Spring Meetings == In April 2025, a Lebanese delegation participated in the IMF–World Bank Spring Meetings in Washington, D.C.,<ref>{{Cite web |title=Spring Meetings {{!}} World Bank Group |url=https://www.worldbank.org/en/meetings/splash/spring |access-date=2025-04-23 |website=World Bank |language=en}}</ref> where it presented a unified reform vision aimed at addressing Lebanon’s protracted financial and economic crisis. The delegation, led by Finance Minister Yassine Jaber, included the Minister of Economy, the Governor of Banque du Liban, and senior presidential advisors. This marked a notable shift from previous years, with the International Monetary Fund (IMF) positively noting the coherence and clarity in Lebanon’s reform approach.<ref name=":9">{{Cite web |title=IMF hears reform pitch: Lebanon presents unified reform vision to IMF at Spring Meetings |url=https://www.lbcgroup.tv/news/news-bulletin-reports/850334/imf-hears-reform-pitch-lebanon-presents-unified-reform-vision-to-imf-a/en?utm_ |access-date=2025-04-23 |website=LBCIV7 |language=en}}</ref><ref>{{Cite news |date=2025 |title=Lebanon hopes to meet foreign bondholders in coming year, finance minister says |url=https://www.reuters.com/world/middle-east/lebanon-hopes-meet-foreign-bondholders-coming-year-finance-minister-says-2025-04-15/?utm_source=chatgpt.com}}</ref><ref>{{Cite web |title=IMF Egypt / Lebanon / Thailand |url=https://mediacenter.imf.org/news/imf-egypt---lebanon---thailand/s/8ec486a8-b999-4569-b995-d9e784f0d76f?utm_source=chatgpt.com |access-date=2025-04-21 |website=IMF Media Center |language=en}}</ref> The delegation outlined a series of proposed reforms covering areas such as tax policy, social security, economic restructuring, and monetary governance. Banque du Liban Governor Karim A. Souaid emphasized the importance of preserving the central bank’s independence and safeguarding the rights of small depositors.<ref name=":9" /> While IMF officials welcomed the renewed seriousness of the Lebanese side, they reiterated that progress would depend on effective implementation—something that had hindered past negotiations due to political divisions and legislative inaction. Further discussions were held with IMF Middle East and Central Asia Director Jihad Azour. In addition, Lebanon sought support through a proposed $1 billion World Bank loan to assist in post-conflict reconstruction and the establishment of a national social safety net. According to the delegation, the reform proposals were internally driven and framed as essential for the country's economic recovery and long-term stability, rather than merely a response to external pressures.<ref name=":9" /> == See also == {{Portal|Lebanon|Economics}} * [[Agriculture in Lebanon]] * [[Beirut Stock Exchange]] * [[Banque de Syrie et du Liban]] * [[Banque du Liban]] (Central Bank) * [[Lebanese pound]] * [[Solidere]] * [[Tourism in Lebanon]] * [[List of banks in Lebanon]] * [[2025 Lebnese bank reformation]] {{Clear}} == References == {{Reflist|30em}} == External links == * [http://www.dailystar.com.lb/Business/Lebanon/2005/Dec-24/6339-bse-trade-sky-high-despite-tensions.ashx BSE trade sky high despite tensions – ''The Daily Star''] * [https://web.archive.org/web/20120303175619/http://www.lebanonembassyus.org/country_lebanon/economy.html Embassy of Lebanon, Washington D.C. - Country Profile, The Economy] * [https://www.icalculator.info/lebanon/income-tax-rates.html Lebanon Tax Rates - iCalculator] * Tariffs applied by Lebanon as provided by ITC's [http://www.macmap.org/QuickSearch/FindTariff/FindTariff.aspx?subsite=open_access&country=422&source=1|ITC Market Access Map], an online database of customs tariffs and market requirements. {{Asia in topic|Economy of}} {{Lebanon topics}} [[Category:Economy of Lebanon| ]] [[Category:Economy of the Arab League]] [[bn:লেবানন#অর্থনীতি]]
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