Editing Economy of Lebanon (section)

== History ==
{{see also|History of Lebanon}}
{| class="wikitable sortable collapsible collapsed" style="float: right;"
|+GDP per capita in international dollars, 1980–2012<ref>{{cite web|url=http://www.imf.org/external/pubs/ft/weo/2012/01/weodata/weorept.aspx?pr.x=22&pr.y=18&sy=1980&ey=2012&scsm=1&ssd=1&sort=country&ds=.&br=1&c=406&s=PPPPC&grp=1&a=1 |title=Middle East and North Africa, Gross domestic product (PPP) per capita GDP, 1980–2012 |publisher=International Monetary Fund |date=14 September 2006 |access-date=17 January 2013}}</ref><ref>{{cite web|url=http://www.imf.org/external/pubs/ft/weo/2012/01/weodata/weorept.aspx?pr.x=67&pr.y=20&sy=1980&ey=2012&scsm=1&ssd=1&sort=country&ds=.&br=1&c=446&s=NGDP_RPCH%2CNGDPDPC%2CPPPPC&grp=0&a= |title=Lebanon, Gross domestic product (PPP) per capita GDP, 1980–2012 |publisher=International Monetary Fund |date=14 September 2006 |access-date=17 January 2013}}</ref>
! Year || Lebanon || [[MENA]] avg
|-
| 1972 || 5,322 || 3,346
|-
| 1981 || 5,897 || 3,581
|-
| 1982 || 3,970 || 3,681
|-
| 1983 || 5,064 || 3,781
|-
| 1984 || 7,592 || 3,903
|-
| 1985 || 9,613 || 3,980
|-
| 1986 || 9,025 || 3,873
|-
| 1987 || 10,722 || 3,869
|-
| 1988 || 7,875 || 3,826
|-
| 1989 || 4,674 || 4,001
|-
| 1990 || 4,158 || 4,191
|-
| 1991 || 5,649 || 4,472
|-
| 1992 || 5,925 || 4,570
|-
| 1993 || 6,352 || 4,658
|-
| 1994 || 6,868 || 4,764
|-
| 1995 || 7,320 || 4,860
|-
| 1996 || 7,606 || 5,138
|-
| 1997 || 7,892 || 5,352
|-
| 1998 || 8,031 || 5,512
|-
| 1999 || 7,928 || 5,585
|-
| 2000 || 8,077 || 5,876
|-
| 2001 || 8,478 || 6,063
|-
| 2002 || 8,792 || 6,261
|-
| 2003 || 9,144 || 6,711
|-
| 2004 || 9,959 || 7,175
|-
| 2005 || 10,367 || 7,360
|-
| 2006 || 10,751 || 7,882
|-
| 2007 || 11,893 || 8,354
|-
| 2008 || 13,116 || 8,735
|-
| 2009 || 14,197 || 10,862
|-
| 2010 || 15,168 || 10,920
|-
| 2011 || 15,523 || 11,896
|-
| 2012 || 15,985 || 13,088
|}
[[File:Beirut 002.jpg|thumb|200x200px|A pedestrian-only street in [[Beirut]]'s central district.]]
The 1975–1990 [[Lebanese Civil War]] seriously damaged [[Lebanon]]'s economic [[infrastructure]], cut national output by half,<ref name="Stinson">{{Cite news|url=http://usatoday30.usatoday.com/news/world/2006-08-01-lebanon-forces_x.htm|title=Lebanese forces may play bigger role in war|last=Stinson|first=Jefferey|date=1 August 2006|work=USA Today |access-date=22 August 2009}}</ref> and had major consequences for Lebanon's position as a [[Middle East]]ern [[entrepot]] and [[bank]]ing hub.<ref name="cia">[https://www.cia.gov/the-world-factbook/countries/lebanon/ Lebanon]. ''[[The World Factbook]]''. [[Central Intelligence Agency]].</ref> After the war, the central government regained its ability to control key port and government facilities. As a result, GDP per capita expanded 353% in the 1990s.<ref>{{cite web|url=http://earthtrends.wri.org/text/economics-business/variable-638.html|archive-url=https://web.archive.org/web/20080131140920/http://earthtrends.wri.org/text/economics-business/variable-638.html|archive-date=31 January 2008|title=Economics, Business, and the Environment – GDP: GDP per capita, current US dollars|publisher=EarthTrends |access-date=31 December 2008}}</ref>
Economic recovery has been helped by a financially sound banking system and resilient small- and medium-scale manufacturers, with family remittances, banking services, manufactured and farm exports, and international aid as the main sources of foreign exchange.<ref name="cia2001">{{cite web|url=http://teacherlink.ed.usu.edu/tlresources/reference/2001WorldFactbook/LEBANON.PDF |archive-url=https://web.archive.org/web/20070604195718/http://teacherlink.ed.usu.edu/tlresources/reference/2001WorldFactbook/LEBANON.PDF |archive-date=4 June 2007 |title=CIA World Factbook 2001 |access-date=17 January 2013}}</ref> Lebanon's economy has made impressive gains since the launch of "Horizon 2000," the government's $20 billion reconstruction program in 1993. Real [[Gross domestic product|GDP]] grew 8% in 1994 and 7% in 1995 before [[Israel]]'s [[Operation Grapes of Wrath]] in April 1996 stunted economic activity. Real GDP grew at an average annual rate of less than 3% per year for 1997 and 1998 and only 1% in 1999. During 1992–98, annual inflation fell from more than 100% to 5%, and [[foreign exchange reserves]] jumped to more than $6 billion from $1.4 billion. Burgeoning capital inflows have generated foreign payments surpluses, and the Lebanese pound has remained relatively stable. Progress also has been made in rebuilding Lebanon's war-torn physical and financial infrastructure. [[Solidere]], a $2-billion firm, is managing the reconstruction of Beirut's [[Beirut Central District|central business district]]; the [[Beirut Stock Exchange|stock market]] reopened in January 1996, and international banks and insurance companies are returning. The government nonetheless faces serious challenges in the economic arena. It has had to fund reconstruction by tapping foreign exchange reserves and boosting borrowing. Reducing the government budget deficit is a major goal of the current government. The gap between rich and poor grew in the 1990s, resulting in popular dissatisfaction over the skewed distribution of the reconstruction's benefits and leading the government to shift its focus from rebuilding infrastructure to improving living conditions.

After the end of the civil war, Lebanon enjoyed considerable stability, Beirut's reconstruction was almost complete,<ref>{{cite web |url=http://www.csbe.org/saliba/essay1.htm |archive-url=https://web.archive.org/web/20020120135232/http://csbe.org/Saliba/essay1.htm |archive-date=20 January 2002 |title=Deconstructing Beirut's Reconstruction: 1990–2000 |publisher=Center for the Study of the Built Environment |access-date=31 October 2006}}</ref> and increasing numbers of tourists poured into the nation's resorts.<ref name="tourism">{{cite news |url=http://www.chron.com/default/article/Lebanon-hopes-for-stability-so-tourism-industry-1895818.php |author=Anna Johnson|year=2006 |title=Lebanon: Tourism Depends on Stability |newspaper=Chron |access-date=31 October 2006}}</ref> The economy witnessed growth, with bank assets reaching over US$75&nbsp;billion,<ref name="economy-stat">{{cite web|url=http://www.audi.com.lb/geteconomy/quarterly/lebanon.pdf |archive-url=https://web.archive.org/web/20081123013845/http://www.audi.com.lb/geteconomy/quarterly/lebanon.pdf |archive-date=23 November 2008 |title=Lebanon Economic Report: 2nd quarter, 2006 |publisher=Bank Audi |access-date=17 January 2013}}</ref> [[Market capitalization]] was also at an all-time high, estimated at $10.9&nbsp;billion at the end of the second quarter of 2006.<ref name="economy-stat" /> The month-long [[2006 Lebanon War|2006 war]] severely damaged Lebanon's economy, especially the tourism sector.<ref>{{cite web |url=http://www.rebuildlebanon.gov.lb/documents/ImpactonfinanceReport-Englishversion-06.pdf |title=Impact of the July Offensive on the Public Finances in 2006 |publisher=Lebanese Ministry of Finance |access-date=17 January 2013 |archive-date=8 August 2019 |archive-url=https://web.archive.org/web/20190808155044/http://www.rebuildlebanon.gov.lb/documents/ImpactonfinanceReport-Englishversion-06.pdf |url-status=dead }}</ref> Over the course of 2008 Lebanon rebuilt its infrastructure mainly in the real estate and tourism sectors, resulting in a comparatively robust post war economy. Major contributors to the reconstruction of Lebanon include [[Saudi Arabia]] (with US$1.5&nbsp;billion pledged),<ref>{{cite web|url=http://www.cynews.com/news/7005070415/ |archive-url=https://web.archive.org/web/20070928180742/http://www.cynews.com/news/7005070415/ |archive-date=28 September 2007 |title=Saudi Arabia Key Contributor To Lebanon's Reconstruction |author=Joseph S. Mayton |publisher=Cyprus News |date=28 September 2007 |access-date=17 January 2013}}</ref> the European Union (with about $1&nbsp;billion)<ref>{{cite web|url=http://reliefweb.int/report/lebanon/donors-pledge-940-million-lebanon |title=Donors pledge more than $940 million for Lebanon |publisher=Reliefweb.int |date=31 August 2006 |access-date=17 January 2013}}</ref> and a few other Persian Gulf countries with contributions of up to $800&nbsp;million.<ref>{{cite web|url=http://www.ain-al-yaqeen.com/issues/20060825/feat2en.htm |archive-url=https://archive.today/20061020061315/http://www.ain-al-yaqeen.com/issues/20060825/feat2en.htm |url-status=dead |archive-date=20 October 2006 |title=The Custodian of the Two Holy Mosques Reviews with the Jordanian King the Situation in Lebanon... |publisher=Ain-Al-Yaqeen |access-date=17 January 2013}}</ref>

Given the frequent security turmoil it has faced, the Lebanese banking system has adopted a conservative approach, with strict regulations imposed by the central bank to protect the economy from political instability. These regulations have generally left Lebanese banks unscathed by the [[2008 financial crisis]]. Lebanese banks remain, under the current circumstances, high on liquidity and reputed for their security.<ref name="Lebanon Banks immune">{{cite news|url=http://news.bbc.co.uk/2/hi/middle_east/7764657.stm|title=Lebanon 'immune' to financial crisis|work=BBC News |date=5 December 2008|access-date=28 January 2010}}</ref> In late 2008, [[Moody's]] shifted Lebanon's sovereign rankings from stable to positive, acknowledging its financial security.<ref>{{cite web|url=https://www.moodys.com/research/Moodys-changes-outlook-for-Lebanons-sovereign-ratings-to-positive-from--PR_169067|title=Moody's changes outlook for Lebanon's sovereign ratings to positive from stable|publisher=Moody's|date=11 December 2008}}</ref> Moreover, with an increase of 51% in the [[Beirut Stock Exchange|Beirut stock market]], the index provider [[MSCI]] ranked Lebanon the world's best performer in 2008.<ref name="Lebanon 2008 profit" /> Lebanon is one of the only seven countries in the world in which the value of the stock market increased in 2008.<ref name="Lebanon 2008 profit">{{cite news|url=http://www.timesonline.co.uk/tol/money/investment/article4881201.ece|archive-url=https://web.archive.org/web/20100525123917/http://www.timesonline.co.uk/tol/money/investment/article4881201.ece|archive-date=25 May 2010|title=Where on earth can you make a decent return?|newspaper=The Sunday Times |date=5 October 2008 |location=London|access-date=28 January 2010 |first=Kathryn |last=Cooper}}</ref> The Lebanese economy experienced continued resilience, growing 8.5 percent in 2008, 7 percent in 2009 and 8.8% in 2010. However, Lebanon's debt to GDP ratio remained one of the highest in the world.<ref>{{cite web |url=https://www.cia.gov/library/publications/the-world-factbook/rankorder/2186rank.html |title=Public debt percentages of GDP |publisher=CIA |work=The World Factbook |date=2014 |access-date=20 April 2015 |archive-date=13 June 2007 |archive-url=https://web.archive.org/web/20070613005546/https://www.cia.gov/library/publications/the-world-factbook/rankorder/2186rank.html |url-status=dead }}</ref>

The [[Syrian civil war|Syrian crisis]] has significantly affected Lebanese economic and financial situation. The demographic pressure imposed by the Syrian refugees now living in Lebanon has led to competition in the labour market. As a direct consequence unemployment has doubled in three years, reaching 20% in 2014. A loss of 14% of wages regarding the salary of less-skilled workers has also been registered. The financial constraints were also felt: the poverty rate increased with 170,000 Lebanese falling under the poverty threshold. In the period between 2012 and 2014, the public spending increased by $1&nbsp;billion and losses amounted to $7.5&nbsp;billion. Expenditures related only to the Syrian refugees were estimated by the Central Bank of Lebanon as $4.5&nbsp;billion every year.<ref name="chronicle.fanack.com">{{cite web |last1=Fanack |title=Lebanon: Syrian Refugees Cost the Economy $4.5 Billion Every Year |url=https://chronicle.fanack.com/lebanon/economy/lebanon-syrian-refugees-cost-the-economy-4-5-billion-every-year/ |url-status=dead |archive-url=https://web.archive.org/web/20150714171926/https://chronicle.fanack.com/lebanon/economy/lebanon-syrian-refugees-cost-the-economy-4-5-billion-every-year/ |archive-date=14 July 2015 |access-date=14 July 2015 |website=Fanack.com}}</ref>

The International Monetary Fund issued a second report on Lebanon in October 2015, where its expectations of the economic growth rate were lowered to 2%, compared to the 2.5% growth rate of the first report, released in April 2015.<ref>{{cite web|title=Influx of Syrian Refugees Continues to Impact Lebanese Economy|url=https://chronicle.fanack.com/lebanon/economy/syrian-refugees-economic-impact/|website=Fanack.com|date=28 June 2016|access-date=25 July 2016|archive-date=14 January 2019|archive-url=https://web.archive.org/web/20190114113819/https://fanack.com/lebanon/economy/syrian-refugees-economic-impact/|url-status=dead}}</ref>

In October 2019, [[Lebanon]] witnessed nationwide protests that erupted over the country's deteriorating economic conditions. Thousands of demonstrations took to the streets of downtown [[Beirut]], calling for the government of Prime Minister [[Saad al-Hariri]] to quit over "its utter failure to stop the deterioration of the economic and living conditions in the country". The protests began after the government announced to charge 20 cents per day for [[Voice over IP|Voice over Internet Protocol]] (VoIP) over social media apps, including [[WhatsApp]], [[Facebook]], and other applications.<ref>{{cite web|url=https://www.westport-news.com/news/article/Nationwide-protests-erupt-in-Lebanon-as-economic-14544564.php|title=Nationwide protests erupt in Lebanon as economic crisis deepens|access-date=18 October 2019|website=Westport News|date=18 October 2019|archive-date=19 October 2019|archive-url=https://web.archive.org/web/20191019120749/https://www.westport-news.com/news/article/Nationwide-protests-erupt-in-Lebanon-as-economic-14544564.php|url-status=dead}}</ref>

Lebanon has a very high level of public debt and large external financing needs.<ref name="expus">{{cite web |title=Doing Business in Lebanon |url=http://export.gov/lebanon/static/Doing%20Business%20in%20Lebanon_Latest_eg_lb_037171.doc |url-status=live |archive-url=https://web.archive.org/web/20130116235829/http://export.gov/lebanon/static/Doing%20Business%20in%20Lebanon_Latest_eg_lb_037171.doc |archive-date=16 January 2013 |access-date=17 January 2013 |publisher=Export.gov}}</ref> The 2010 public debt exceeded 150.7% of GDP, ranking fourth highest in the world as a percentage of GDP, though down from 154.8% in 2009.<ref name="cia2">{{Citation |title=Lebanon |date=2023-03-02 |url=https://www.cia.gov/the-world-factbook/countries/lebanon/ |work=The World Factbook |access-date=2023-03-14 |publisher=Central Intelligence Agency |language=en}}</ref> At the end 2008, finance minister [[Mohamad Chatah]] stated that the debt was going to reach $47&nbsp;billion in that year and would increase to $49&nbsp;billion if privatization of two telecoms companies did not occur.<ref>{{cite news |last=Bayoumy |first=Yara |date=2 January 2009 |title=RPT-UPDATE 1-Lebanon public debt at $89 bln end-2008-minister |work=Reuters |url=http://in.reuters.com/article/asiaCompanyAndMarkets/idINL217217120090102?pageNumber=1&virtualBrandChannel=0 |url-status=dead |access-date=18 October 2009 |archive-url=https://web.archive.org/web/20201027040534/https://in.reuters.com/article/asiaCompanyAndMarkets/idINL217217120090102?pageNumber=1&virtualBrandChannel=0 |archive-date=27 October 2020}}</ref> The [[Daily Star (Lebanon)|Daily Star]] wrote that exorbitant debt levels have "slowed down the economy and reduced the government's spending on essential development projects".<ref>{{cite news |date=20 May 2004 |title=IMF: Lebanon's debt alarming |work=The Daily Star |publisher=Center for Democracy and the Rule of Law |url=http://www.cggl.org/scripts/new.asp?id=227 |url-status=dead |access-date=18 October 2009 |archive-url=https://web.archive.org/web/20110511081155/http://www.cggl.org/scripts/new.asp?id=227 |archive-date=11 May 2011}}</ref>

During the early part of 2020, the [[History of Lebanon#2020 meltdown of central bank|central bank (BdL) defaulted]] on $90 sovereign debt obligations and the government needed recourse to the IMF for a shortfall of $50 billion.

On 4 August 2020, the [[2020 Beirut explosion|explosion of 2,750 tons ammonium nitrate]] in a [[Beirut]] port warehouse caused the destruction of the "only large grain silo" in the country,<ref name="silo">{{cite news |title=Exclusive: Lebanon navigates food challenge with no grain silo and few stocks |url=https://www.reuters.com/article/us-lebanon-security-blast-grains-exclusi/exclusive-lebanon-navigates-food-challenge-with-no-grain-silo-and-few-stocks-idUSKCN25317I |publisher=Reuters |date=6 August 2020}}</ref> in addition to more than 200 people killed and several square kilometres of pulverised buildings in the downtown core of the city. By 9 August, President of France [[Emmanuel Macron]] had counted over €250 million of global contributions to the relief effort.<ref name="emcbc">{{cite news |title=Donors pledge $398.7M in aid after Beirut blast but Lebanon corruption concerns persist |url=https://www.cbc.ca/news/world/beirut-explosion-aid-donrs-1.5679851 |agency=Associated Press|publisher=CBC |date=9 August 2020}}</ref> On 10 August, the government of [[Hassan Diab]] resigned.<ref name="bnnp">{{cite news |last1=Fouquet |first1=Helen |title=Lebanese government steps down in the aftermath of protests and Beirut explosion |url=https://nationalpost.com/news/world/lebanese-government-steps-down-in-the-aftermath-of-protests-and-beirut-explosion/ |agency=Bloomberg News |publisher=National Post, a division of Postmedia Network Inc |date=10 August 2020}}</ref> The day before, [[International Monetary Fund|IMF]] director [[Kristalina Georgieva]] had laid down four conditions for the co-operation of her organization:<ref name=bnnp />
*restoring the financial solvency of the state,
*cutting losses at state-owned companies,
*passing a law to regulate capital outflows and
*setting up a social safety net.
On 14 August, the [[United Nations Office for the Coordination of Humanitarian Affairs]] (UNOCHA) launched a $565 million appeal for donors of aid to victims of the explosions. The UN effort was to focus on: meals, first aid, shelters, and repair of schools. Some of the money that Macron collected would be used by the UNOCHA.<ref name="emlap">{{cite news |last1=Lederer |first1=Edith M. |title=UN launches $565-million appeal for Beirut explosion victims |url=https://www.theglobeandmail.com/world/article-un-launches-565-million-appeal-for-beirut-explosion-victims/ |agency=Associated Press|work=The Globe and Mail |date=14 August 2020}}</ref>

=== 2019–present economic crisis ===
{{Main|COVID-19 recession|Lebanese liquidity crisis}}
According to a [[World Bank]] report, Lebanon's economy which was structurally strained before the Syrian shock suffered a real blow as an aftermath of the Syrian crisis which brought around 1.5 million Syrian refugees into Lebanon.<ref>{{Cite web|title=Overview|url=https://www.worldbank.org/en/country/lebanon/overview|access-date=2020-09-19|publisher=World Bank|language=en}}</ref> The GDP growth rate declined by around 1 percent in 2018.<ref>{{Cite web|title=GDP growth (annual %) - Lebanon {{!}} Data|url=https://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG?locations=LB|access-date=2021-12-21|website=data.worldbank.org}}</ref> In August 2019, the [[USD]] parallel exchange rate started diverging from the official exchange rate; the official exchange rate for the USD had been [[Lebanese pound|£L]]1,507.5 since 1997, while the parallel exchange rate was £L1,600 in the fall of 2019 and would increase to around £L4,200 in May 2020.<ref name=":0">{{Cite web|url=https://lirarate.com/|title=Lira Rate &#124; USD to LBP in Black Market &#124; Dollar to LBP|website=Lira Rate}}</ref><ref>{{Cite web |url=https://www.bdl.gov.lb/statistics/table.php?name=t5282usd |title=Exchange Rates |access-date=18 April 2020 |archive-date=10 July 2020 |archive-url=https://web.archive.org/web/20200710212215/https://www.bdl.gov.lb/statistics/table.php?name=t5282usd |url-status=dead }}</ref> The USD parallel exchange rate is increasing because of the dollar shortage in Lebanon.<ref>{{Cite web|url=https://www.aljazeera.com/news/2019/10/lebanese-petrol-stations-shudder-halt-nationwide-strike-191011171626159.html|title=Lebanese petrol stations shudder to a halt amid nationwide strike|publisher=Al Jazeera|date=11 October 2019|author=Timour Azhari}}</ref> In a bid to lower the dollar price, the central bank made an agreement with the licensed exchangers to make the official rates on offer at £L3,860/3,910.<ref name=":1">{{cite web |url=https://www.dailystar.com.lb/News/Lebanon-News/2020/Jun-19/507724-lebanon-central-bank-aims-to-bring-dollar-price-down-progressively-salameh.ashx |title=Lebanon Central Bank aims to bring dollar price down progressively: Salameh |website=www.dailystar.com.lb |access-date=25 June 2020 |archive-date=29 November 2020 |archive-url=https://web.archive.org/web/20201129021858/https://www.dailystar.com.lb//News/Lebanon-News/2020/Jun-19/507724-lebanon-central-bank-aims-to-bring-dollar-price-down-progressively-salameh.ashx |url-status=dead }}</ref> However, despite the central bank's efforts, on 23 June 2020, the black market dollar reached a staggering rate of £L 6,075 devaluing the Lebanese pound by 75%.<ref>{{cite web|url=https://www.dailystar.com.lb/News/Lebanon-News/2020/Jun-23/507923-lebanese-pound-plunges-to-record-low-on-black-market.ashx|title=Lebanese pound plunges to record low on black market |work=The Daily Star}}</ref> This dollar shortage also caused 785 restaurants and cafes to close between September 2019 and February 2020 and caused 25,000 employees to lose their jobs.<ref>{{Cite web|url=https://english.aawsat.com/home/article/2140916/lebanon-785-restaurants-cafes-closed-25000-employees-laid|title=Lebanon: 785 Restaurants, Cafes Closed, 25,000 Employees Laid Off|website=Asharq Al-Awsat}}</ref><ref>{{Cite web|url=https://www.aljazeera.com/news/2019/11/dollar-shortage-lebanons-economic-crisis-191125160725930.html|title=US dollar shortage and Lebanon's economic crisis|publisher=Al Jazeera|date=25 November 2019|author=Zeina Khodr}}</ref> This economic crisis made Lebanon's [[gross domestic product]] fall to about $44 billion, which was about $55 billion the year before.<ref>{{Cite web|url=https://www.dailystar.com.lb/Business/Local/2020/Mar-11/502598-lebanons-gdp-declines-to-44-billion-from-55-billion.ashx|title=Lebanon's GDP declines to $44 billion from $55 billion|work=The Daily Star|date=11 March 2020|access-date=20 April 2020|archive-date=8 July 2020|archive-url=https://web.archive.org/web/20200708053423/https://www.dailystar.com.lb//Business/Local/2020/Mar-11/502598-lebanons-gdp-declines-to-44-billion-from-55-billion.ashx|url-status=dead}}</ref> The crisis became worse when the [[COVID-19 pandemic]] affected the Lebanese economy.<ref>{{Cite web|url=https://alkhaleejtoday.co/international/94770/COVID-19-Lebanon%E2%80%99s-economic-crisis-explodes.html|title=404. That's an error.|website=AlKhaleej Today|date=December 2020 }}</ref> In 2020, the country defaulted for the first time on $30 billion in bonds and tried to seek help from the IMF but the negotiations never reached fruition.<ref name=":2">{{Cite news|title=For the first time, Lebanon defaults on its debts|newspaper=The Economist|url=https://www.economist.com/middle-east-and-africa/2020/03/12/for-the-first-time-lebanon-defaults-on-its-debts|access-date=2020-09-19|issn=0013-0613}}</ref><ref>{{Cite web|title=Default Showdown Pits Creditors Against Lebanon Seeking Relief|url=https://www.bloombergquint.com/business/debt-default-showdown-looms-as-lebanon-freezes-eurobond-payment|access-date=2020-09-19|website=BloombergQuint|date=8 March 2020 |language=en}}</ref>

The liquidity crisis also lead to a restriction on the withdrawals from US dollar bank accounts.<ref>{{Cite web|title=Lebanon's Financial Crisis: Where Did the Money Go?|url=http://lcps-lebanon.org/agendaArticle.php?id=158|access-date=2020-10-04|website=lcps-lebanon.org}}</ref> Depositors needed to preserve the value of their savings, especially following press reports about possible haircuts and restructuring of the banking sector. They therefore turned to buying real estate.<ref name="businessnewsfay">{{Cite news|url=http://www.businessnews.com.lb/cms/Story/StoryDetails/8653/Solidere-share-price-doubles-compared-with-October-2019|title=Solidere share price doubles compared with October 2019|last=Nakhoul|first=Shikrallah|date=1 June 2020|work=businessnews.com.lb|accessdate=19 July 2020}}</ref> For example, revenues from land sales of the major real estate developer, [[Solidere]] company, soared from nearly $1.3 million to $234.5 million.<ref name="businessnewshan">{{Cite news|url=http://www.businessnews.com.lb/cms/Story/StoryDetails.aspx?ItemID=8690|title=Solidere posts first net profit since 2016|last=Khalaf|first=Gisele|date=1 July 2020|work=businessnews.com.lb|accessdate=19 July 2020}}</ref> Also, these depositors turned to buying shares in Solidere company, which lead to a rise of 500% in its price between the start of the liquidity crisis and April 2021.<ref name="alarabiya">{{Cite news|url=https://www.alarabiya.net/aswaq/special-stories/2021/03/18/لبنان-سهم-سوليدير-العقارية-في-لبنان-يرتفع-لأعلى-مستوياته-منذ-2009|title=سهم سوليدير اللبنانية يرتفع لأعلى مستوياته منذ 2009|date=18 March 2021|work=[[Al Arabiya]]|accessdate=7 April 2021}}</ref>

The already battered economy of Lebanon suffered fresh blow with the port blast on 4 August 2020. Economists have claimed that the blasts could result in the contraction of Beirut's GDP by around 20–25% for the year. The current figure surpasses IMF's last forecast of 12% crash in GDP because of the ongoing and increasing economic and political crisis in Lebanon.<ref name=":3">{{cite web|url=https://www.reuters.com/article/us-lebanon-security-blast-economy/lebanons-battered-economy-dealt-fresh-blow-after-port-blast-hits-achilles-heel-idUSKCN2532SH|title=Lebanon's battered economy dealt fresh blow after port blast hits 'Achilles heel'|access-date=7 August 2020|publisher=Reuters|author=Suleiman al-Khalidi |date=7 August 2020}}</ref>

In March 2021, Lebanon approved an emergency assistance package from the World Bank worth $246 million in order to support struggling families and strengthen the social safety and try to face the economic crisis.<ref>{{Cite web|date=2021-03-13|title=Lebanon approves World Bank rescue plan for needy families|url=https://arab.news/8k8zu|access-date=2021-03-14|website=Arab News|language=en}}</ref>

On March 16, as the Lebanese pound jumped on the black market from £L13,000 to £L15,000 against the US dollar, protesters took to the streets, grocery stores closed and bakeries threatened to close.<ref>{{Cite web|date=2021-03-16|title=Lebanese erupt in rage as currency hits new low|url=https://arab.news/529g7|access-date=2021-03-17|website=Arab News|language=en}}</ref>

After the meeting of the President Aoun and Prime Minister-designate Saad Hariri on March 18, the Lebanese pound dropped from £L15,000 against the dollar on the black market to £L12,500.<ref>{{Cite web|first=Souad|last=Lazkani|date=2021-03-18|title=The Lebanese Lira Is Gaining Value Against The Dollar Ahead Of Aoun-Hariri Meeting|url=https://www.the961.com/lebanese-lira-rose-aoun-hariri-meeting/|access-date=2021-03-19|website=The961|language=en-US}}</ref>

As of 2023, Lebanon is considered by some to have become a [[failed state]], suffering from chronic  poverty, economic mismanagement and a banking collapse.<ref>{{cite web |url=https://www.pbs.org/newshour/show/lebanon-struggles-to-emerge-from-financial-crisis-and-government-corruption |website=pbs.org |access-date=27 February 2024 |title=Lebanon struggles to emerge from financial crisis and government corruption |date=3 July 2023 }}</ref> Lebanon’s poverty rate have surged from 20 percent to over 80 percent after 2019, driven by economic crises worsened by the [[2020 Beirut explosion]] and the [[COVID-19 pandemic]].<ref name=":7">{{Cite book |last=Deeb |first=Lara |title=Love across difference: mixed marriage in Lebanon |date=2024 |publisher=Stanford University Press |isbn=978-1-5036-4076-4 |location=Stanford, CA}}</ref> These crises have intensified resource shortages and deepened reliance on sectarian patronage systems that have further entrenched societal divisions and accompanying political and economic stagnation.<ref name=":7" />

==== Causes ====

===== External debt =====
After the civil war, the Lebanese government resorted to massive borrowing to finance its post-war restructuring. The yearly growth of gross debt between 1993 and 1995 was 123 percent and between 1995 and 2000 was 171 percent.<ref>{{Cite web|last=Chbeir|first=Rouba|date=18 May 2019|title=A Historical Analysis of Lebanon's Public Debt|url=https://blog.blominvestbank.com/wp-content/uploads/2019/05/A-Historical-Analysis-of-Lebanon’s-Public-Debt.pdf}}</ref> Between 2005 and 2018, the yearly growth of debt has averaged around 22 percent, and in comparison the GDP growth rate for the same period has been in single digits with an exception of 2009. This high debt has caused Lebanon to spend a big chunk of its revenues in debt servicing; on average, close to 45 percent is spent by the government as interest payments. In 1996, interest payments made up almost 68 percent of that year's budget deficit.<ref>{{Cite web|last=Salti|first=Nisreen|title=No Country for Poor Men: How Lebanon's Debt Has Exacerbated Inequality|url=https://carnegie-mec.org/2019/09/17/no-country-for-poor-men-how-lebanon-s-debt-has-exacerbated-inequality-pub-79852|access-date=2020-09-19|website=Carnegie Middle East Center|language=en}}</ref> With debt piling up and growth being minuscule, Lebanon's debt to GDP ratio reached 178 percent by the end of 2019, which makes it the third most indebted country after [[Greece]] and [[Japan]].<ref>{{Cite web|title=Lebanon's Deepening Economic Crisis Laid Bare by Beirut Blast|date=13 August 2020 |url=https://www.bloombergquint.com/businessweek/beirut-explosion-lebanon-was-already-in-an-economic-crisis-before-the-blast|access-date=2020-09-19|publisher=BloombergQuint|language=en}}</ref> In 2020, Beirut defaulted on a $1.2 billion [[Eurobond (external bond)|external bond]], the first sovereign default in its history. The nation is currently in discussions with a group of creditors about a possible restructuring of a defaulted Eurobond.<ref>{{Cite news|title=Lebanon Will Default on Foreign Debt Payment Amid Deepening Economic Crisis|newspaper=The New York Times|date=7 March 2020|url=https://www.nytimes.com/2020/03/07/world/middleeast/lebanon-debt-financial-crisis.html|last1=Yee|first1=Vivian}}, New York Times</ref><ref>{{Cite web|title=Distressed-Debt Funds Team Up as Lebanon Bonds Plunge to Records|website=[[Bloomberg News]] |url=https://www.bloomberg.com/news/articles/2020-02-12/lebanon-s-bonds-plunge-to-record-lows-as-greylock-forms-group, }}Bloomberg News</ref> A successful restructuring would allow the country to again access external credit markets.

===== Currency crisis =====

Lebanon's national currency, the Lebanese pound is pegged to the US dollar at £L15,000 to US$1. This fixed rate has been unstable due to the depreciating value of the pound in the black market. According to reports, the pound was trading at £L8,100 to US$1 in 2019 on the black market. The causes of the pound's depreciation can be traced back to the economy's dependence on imports. Lebanon in 2018 imported US$20 bn worth of goods and exported goods worth only US$3 bn.<ref>{{Cite web|title=Foreign trade figures of Lebanon – Economic and Political Overview – Nordea Trade Portal|url=https://www.nordeatrade.com/en/explore-new-market/lebanon/trade-profile|access-date=2020-09-19|website=www.nordeatrade.com|archive-date=27 October 2020|archive-url=https://web.archive.org/web/20201027082042/https://www.nordeatrade.com/en/explore-new-market/lebanon/trade-profile|url-status=dead}}</ref><ref name=":0" /> This [[trade deficit]] also widened as the remittances share, which was around 24 percent in 2008 declined to nearly 12 percent in 2018. This coupled with geopolitical tensions of the region, caused the Pound-Dollar peg rate to wither. As a response, the [[central bank]] resorted to more borrowing and also issued a directive that required all money transfer offices to cash out transfers in the local currency, further exacerbating the dollar crunch.<ref>{{Cite web|last=Meuse|first=Alison Tahmizian|date=2019-10-27|title=Lebanon's shuttered banks bracing for dollar run|url=https://asiatimes.com/2019/10/lebanons-shuttered-banks-bracing-for-dollar-run/|access-date=2020-09-19|website=Asia Times|language=en-US}}</ref><ref name=":4">{{Cite news|date=2020-08-05|title=Lebanon: Why the country is in crisis|language=en-GB|work=BBC News|url=https://www.bbc.com/news/world-middle-east-53390108|access-date=2020-09-19}}</ref><ref name=":1" />

===== Corruption and political instability =====
After [[2020 Beirut explosion|a devastating explosion in Beirut]] on 4 August 2020 that killed at least 200 people, the government, headed by Prime Minister [[Hassan Diab]], announced that his government was stepping down. In his speech, Mr. Diab said that corruption cases were widespread in the country's political and administrative landscape; other calamities hiding in many minds and warehouses, and which pose a great threat, are protected by the class that controls the fate of the country.<ref name=":4" /><ref name=":3" />

According to reports, the financial troubles and political inaction had caused growing anger and frustration among people who began protesting in October last year. Protesters demanded an end to corruption and the resignation of political leaders including the then Prime Minister [[Saad Hariri|Saad al-Hariri]]. This year, the newly formed government under Diab faced the same accusations of corruption.<ref name=":5">{{Cite web|date=2020-08-05|title=A tragedy was already unfolding in Lebanon before the explosion|url=https://www.abc.net.au/news/2020-08-06/lebanon-in-economic-political-crisis-before-beirut-explosion/12525920|access-date=2020-09-19|website=www.abc.net.au|language=en-AU}}</ref> In November 2019, The central bank of Lebanon was accused of running a Ponzi scheme as it relied on fresh borrowing to service its debt. The bank denied the allegations stating that its action was in par with the 1963 Code of Money and Credit.<ref>{{Cite news|last=Arnold|first=Tom|date=2019-11-15|title=In Lebanon, a renowned central bank governor faces attack|language=en|work=Reuters|url=https://www.reuters.com/article/us-lebanon-protests-cenbank-idUSKBN1XP1FL|access-date=2020-09-19}}</ref> Amidst the failing banking system, banks resorted to putting informal curbs on dollar withdrawals and international transfers, stirring mass protests and police violence.<ref>{{Cite web|date=2020-01-16|title=Curbs on withdrawals by banks trigger protests in Lebanon|url=https://peoplesdispatch.org/2020/01/16/curbs-on-withdrawals-by-banks-trigger-protests-in-lebanon/|access-date=2020-09-19|website=Peoples Dispatch|language=en-US}}</ref> The pandemic brought the protests to a halt for some time but the port explosion in Beirut once again brought people to the streets, who, as reports state, have lost faith in the political elite.<ref name=":4" /> Some estimates state that half of Lebanon's population is living near or [[Poverty in Lebanon|below the poverty line]] and thousands of people have lost their jobs. There have been incessant power cuts and some residents have been calling the blackouts worse than those witnessed in the 1975–1990 civil war.<ref name=":5" />