About
The Lebanon Economic Monitor (LEM) is a biannual publication by the World Bank that tracks Lebanon’s economic performance, analyzes policy developments, and outlines macroeconomic trends and risks. The Spring 2025 edition, titled “Turning the Tide?”, assesses Lebanon’s post-conflict recovery outlook and offers a reform roadmap to stabilize the economy and restore growth.
What It Covers
The Monitor examines:
Economic performance and forecasts
Fiscal and monetary trends
Debt and external balances
Inflation and exchange rate dynamics
Policy responses and reform efforts
Economic Collapse Deepens
2024 GDP contraction was steeper than expected at –7.1%, pushing Lebanon’s total economic decline since 2019 to nearly –40%.
The conflict with Israel worsened an already dire crisis, especially in agriculture, tourism, and commerce — which together accounted for 77% of economic losses.
Poverty and vulnerability increased dramatically, with low-income and informal workers most affected.
2025 Growth Outlook: Fragile but Possible
Real GDP is projected to grow by 4.7% in 2025, driven by:
Reform momentum
A rebound in tourism and household consumption
Limited capital inflows and base effects
However, this outlook depends heavily on continued political stability and concrete reform progress.
Inflation and Exchange Rate
2025 inflation is projected at 15.2%, a decline from past years, thanks to relative exchange rate stability.
The report explains that post-2019 inflation in Lebanon has been largely exchange rate-driven, especially due to dollarization and price sensitivity to imports.
Despite stabilization, inflation remains above global averages due to persistent domestic challenges.
Fiscal Developments
2024 fiscal surplus: 0.5% of GDP
2024 revenues: 15.3% of GDP (~$3.96 billion)
Why It Matters
At a moment when Lebanon stands at a crossroads, the report offers data-driven insights and realistic policy options. It sheds light on the challenges ahead while identifying opportunities to reverse decline and rebuild resilience through credible, coordinated reforms.
