Growth is expected to remain subdued in 2017
The Washington-based IMF says the conflict in Syria continues to dominate Lebanons economic outlook, with registered refugees accounting for more than one-quarter of the population.
The refugee presence is straining local communities, adding to poverty and unemployment, and placing further pressure on the economys already-weak public finances and infrastructure, said the IMF in its statement on the Lebanese economy after completing its Article IV consultation in mid-December last year.
The IMF estimates that GDP increased by 1 percent in 2015 and expect a similar growth rate for 2016, and for 2017 it does not expect growth to return to higher levels. Lebanons traditional growth driverstourism, real estate, and constructionhave received a significant blow and a strong rebound is unlikely based on current trends, it says.
Inflation declined sharply in 2016 on the back of lower oil prices. It is forecast to return to about 2 per cent by early 2017.
Lebanon elected Michel Aoun as president in October last year, and appointed a Saad Hariri as the prime minister. One of the governments main challenges will be managing public debt which sat at about 138 per cent of GDP in 2015.
Lebanon: Selected Economic Indicators, 201418 | |||||
2014 Act. | 2015 Act. | Projections | |||
2016 | 2017 | 2018 | |||
Output and prices | (Annual percentage change) | ||||
Real GDP (market prices) | 2.0 | 1.0 | 1.0 | 2.0 | 2.5 |
GDP deflator | 2.8 | 0.9 | 0.9 | 1.0 | 1.6 |
Consumer prices (period average) | 1.9 | -3.7 | -0.7 | 2.0 | 2.0 |
Central government finances (cash basis) | (In percent of GDP) | ||||
Revenue | 21.8 | 18.8 | 19.0 | 19.0 | 19.2 |
Expenditure | 27.8 | 26.2 | 26.9 | 27.5 | 28.3 |
Budget balance | -6.0 | -7.3 | -7.9 | -8.4 | -9.1 |
Primary balance | 2.4 | 1.4 | 1.1 | 1.5 | 1.4 |
Total government debt | 133 | 138 | 144 | 148 | 151 |
Monetary sector | (Annual percentage change, unless otherwise indicated) | ||||
Credit to the private sector | 9.3 | 5.9 | 1.9 | 3.0 | 4.2 |
Broad money 1/ | 6.0 | 4.8 | 5.5 | 4.0 | 4.0 |
Interest rates (period average, in percent) | |||||
Three-year Treasury bill yield | 6.6 | 6.6 |
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Five-year Eurobond yield | 5.3 | 5.7 |
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External sector | (In percent of GDP, unless otherwise indicated) | ||||
Exports of goods (in $, percentage change) | -7.8 | 2.4 | 2.4 | 6.0 | 5.5 |
Imports of goods (in $, percentage change) | -2.2 | -6.4 | 4.0 | 7.0 | 3.8 |
Current account balance | -25.3 | -18.2 | -17.5 | -17.4 | -17.1 |
Foreign direct investment | -3.5 | -3.4 | -4.5 | -4.4 | -4.7 |
Total external debt 2/ | 170 | 175 | 179 | 180 | 179 |
Gross reserves ($ bn) 3/ | 37.3 | 36.7 | 40.9 | 39.4 | 37.4 |
In percent of short-term external debt 4/ | 50.0 | 46.8 | 49.4 | 46.1 | 42.2 |
In percent of total banking system deposits | 25.8 | 24.2 | 25.6 | 23.8 | 21.6 |
Exchange rate | 1507.5 | 1507.5 |
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Real effective exchange rate (annual average, percentage change) | 1.2 | 10.0 |
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Sources: Lebanese authorities; and IMF staff estimates.
1) Defined as currency in circulation plus resident and nonresident deposits.
2) Includes nonresident deposits.
3) Excluding gold and encumbered assets.
4) Short-term debt on a remaining maturity basis, including short-term nonresident deposits.
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