According to the just released Lebanon Economic Monitor of the World Bank, Lebanon’s economic outlook for 2025 is shaped by a fragile stabilization in the political and security environment. This follows the end of the conflict and the resolution of a two-year political paralysis with the election of a president and the formation of a reform-oriented government. While this renewed momentum presents an opportunity to begin addressing Lebanon’s overlapping financial, economic, and institutional crises, the outlook remains highly contingent on sustained improvements in the security situation and tangible progress on key reforms.  The real GDP contraction for 2024 has been revised downward to 7.1%, bringing the cumulative decline since 2019 to nearly 40%. The conflict and its aftermath have exacerbated poverty and vulnerability in Lebanon. Agriculture, commerce, and tourism, sectors accounting for 77% of economic losses, are key income sources for low-wage and informal workers now at risk. Reconstruction efforts remain slow, constrained by Lebanon’s ongoing financial crisis and a lack of external financing, which is unlikely to materialize without comprehensive reforms.  Real GDP is projected to grow by 4.7% in 2025, supported by anticipated reform progress, a recovery in tourism and consumption, limited capital inflows, and a base effect. Nonetheless, the outlook remains highly sensitive to progress on key fronts, particularly if reform momentum stalls or security deteriorates. The unresolved financial crisis and a deeply impaired banking sector continue to impede large-scale financial inflows and private investment.  Inflation is projected to moderate to 15.2% in 2025, assuming continued exchange rate stability and subdued global inflation. However, risks remain, notably the impact of heightened global trade uncertainty. In fact, growing uncertainty surrounding global trade could carry broader implications for Lebanon.  While direct effects may be limited, given that exports to major markets account for only around 4% of Lebanon’s total goods exports, the indirect effects are more difficult to predict and will depend on how evolving global trade dynamics influence investment, inflation, and economic activity worldwide.  This edition of the LEM includes special analyses on inflation trends and real effective exchange rate (REER) dynamics respectively. Lebanon’s inflation broadly followed global trends prior to the crisis, though domestic structural factors also played a role. Since 2019, however, inflation has been driven largely by exchange rate depreciation, with varying impacts across price components depending on import content and tradability.  Drawing on two decades of policy dialogue, technical assistance, and World Bank-financed projects, the Special Focus offers a contribution to the government’s reform agenda by outlining a targeted one-year policy action plan. The ministerial statement sets out four high-level overarching priorities: (i) halting financial and economic deterioration and identifying growth enablers; (ii) strengthening social security; (iii) combating waste and corruption; and (iv) preparing a fair parliamentary elections law. To support government reform, the Special Focus offers a comprehensive one-year policy action plan that brings together distills key lessons from years of World Bank engagement and policy dialogue in Lebanon into a set of feasible, high-impact actions that align with the government’s stated objectives and can be implemented within its limited tenure. Proposed policy actions prioritized restoring macro-financial stability; rebuilding citizens’ trust; and laying the foundation for a new, successful economic development model. (ICE BEIRUT)

Fonte notizia: Bank Audi 23-29 June, 2025