In its Macro Poverty Outlook dated April 10, 2025 and its Middle East & North Africa (MENA) Economic Update issued this month, the World Bank projected Lebanon's real GDP to shift from a contraction of 7.1% in 2024 to a growth rate of 4.7% in 2025, compared to a real GDP growth rate of 2.6% in the MENA region and of 3.4% for the region’s oil-importing economies. It expected Lebanon to post the first positive growth rate this year since 2017, driven by the anticipated implementation of reforms, a rebound in tourism activity, improved consumption, limited reconstruction, and base effects from the sharp contraction of 21.4% in 2020. In addition, it expected the average inflation rate to regress from 45.2% in 2024 to 15.2% in 2025, due in part to the stabilization of the exchange rate of the Lebanese pound to the US dollar and to the dollarization of several components of the Consumer Price Index basket.  In addition, it estimated that the recent conflict resulted in $6.8bn in physical asset damages, $7.2bn in economic losses, and anticipated the recovery and reconstruction costs at about $11bn. Also, it expected the impact of the conflict to deepen the poverty and vulnerability levels of the displaced population. It said that the agriculture, commerce, and tourism sectors accounted for77% of economic losses, which heavily affected low-wage and informal workers. Also, it indicated that agricultural losses affected communities in the South in particular, while it expected disruptions in healthcare, education, and housing to aggravate the risks of poverty in the long term. It added that the mounting economic losses are exacerbating Lebanon's enduring socioeconomic challenges.  Further, it noted that Lebanon’s political paralysis has ended after more than two years with the election of the Commander in Chief of the Lebanese Armed Forces Joseph Aoun as President of the Republic in January 2025 and the formation of a new government under Prime Minister Nawaf Salam on February 8, 2025. It indicated that the formation of a reform-committed government represents a crucial opportunity to address Lebanon’s prolonged crisis through a comprehensive recovery plan. It considered that the implementation of reforms is urgent, as the country is grappling with a five-year financial crisis and vast reconstruction challenges following the recent conflict.  Also, it estimated that the fiscal balance posted surpluses of 0.5% of GDP in each of 2023 and 2024, relative to a deficit of 2.9% of GDP in 2022, driven by stronger-than-expected revenue collection and spending restraints. It said that public revenues were equivalent to 15.3% of GDP in 2024 and surpassed the government’s projections in the ratified budget due to better-than-expected tax collection in the first nine months of 2024, and added that tax receipts accounted for 77% of total revenues. It noted that expenditures were equivalent to 14.7% of GDP in 2024 compared to 13.2% of GDP in 2023, given that Banque du Liban (BdL) imposed restrictions on the use of the public sector’s deposits at BdL, and noted that these deposits increased by 45% in 2024. Also, it stated that the previous government approved a draft budget for 2025 before the conflict escalated in September 2024, with revenues and expenditures at 15.9% of GDP each, and that the new government approved the budget by decree as constitutionally allowed.  In parallel, it said that Lebanon recorded a current account deficit of 22.2% of GDP in 2024 compared to a deficit of 28% of GDP in 2023, primarily driven by a deficit in trade-in-goods and the impact of the recent conflict on the Lebanese economy. It noted that the trade-in-goods deficits have been historically offset in part by trade-in-services surpluses. But it stated that the decline in tourism receipts led to a trade-in-services deficit of 3.3% of GDP in 2024.  It considered that several risks could weigh on the Lebanese economic outlook and include a deterioration in security conditions that may affect sentiment, tourism activity, financial flows, and consumption, as well as the indirect effects of rising global trade uncertainties that remain unclear.  (ICE BEIRUT)

Fonte notizia: Byblos Bank, April 14 -26, 2025