Economics Explained

Lebanon Lost Half Its Economy In 2 Years

Feb 23, 2024
Exploring Lebanon's economic crisis with hyperinflation, population decline, and a plummeting GDP. Factors include post-war recovery, debt dynamics, Syrian conflict, US sanctions, banking instability, and government mismanagement. Analysis of challenges like shrinking GDP, population decline, banking risks, struggling industry sector.
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INSIGHT

Lebanon's Severe Economic Collapse

  • Lebanon lost 20% of its population in 5 years due to a worsening economic crisis.
  • The country's GDP halved from $52 billion in 2019 to $23 billion in 2021, the most severe contraction in history.
INSIGHT

Post-War Economic Growth

  • Lebanon rebuilt quickly post-civil war, quadrupling its real economic output from 1990 to 2000.
  • Growth was fueled by tax reforms, remittances, foreign aid, and conservative banks attracting regional money.
INSIGHT

Debt as Growth Driver

  • High debt-to-GDP ratio often signals risk but in Lebanon's case, it reflected investor confidence driving growth.
  • Borrowing foreign currency was essential for Lebanon to invest in infrastructure and grow industries.
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