Lebanon » Introduction

Basic Economic Facts

GDP composition by Sector

The private sector contributes to around 75% of aggregate demand, a well-diversified sector that covers the totality of economic sectors and is a major pillar for growth and recovery. The Lebanese economy is also a typical open economy with a large banking sector equivalent to more than 2.5 times its economic sector and providing an important support to aggregate demand.

Within this business environment, Lebanon is a country that has today reconstructed its infrastructure, with 80% of the basic infrastructure rehabilitated using the best technologies A country that has revised basically most of its business laws and regulations, has a reputable banking sector with high financial standing, strictly regulated by the Central Bank, and that has recently launched in-depth growth-oriented measures aimed at stimulating the economy.

The Lebanese economy has been facing some signs of sluggishness over the past couple of years, but are mainly tied to short term challenges. Growth has contracted in real terms, due to a decline in aggregate demand in both its consumption and investment components.

The newly appointed government launched a series of ambitious measures aimed at improving household and business sentiment and stimulating growth, drawing on a largely underutilized capacity estimated at close to 35% of potential. The expansionary government policies (deregulation, tariff reduction, launch of frozen capital spending, open sky policy, interest rate subsidies for productive lending, etc…) are expected to have a direct positive impact on economic activity, though at the detriment of a tougher fiscal consolidation in the near term.