Street art in Beirut. (Credit: João Sousa/L'Orient Today/File photo)
BEIRUT — Lebanon’s GDP growth rate could start recovering this year for the first time since before the country’s economic crisis, according to a UN economic report released on Jan. 4.
In its latest report, the United Nations Department of Economic and Social Affairs (UN DESA) forecast a 1.7 percent growth of Lebanon’s GDP in 2024 and 3.8 percent growth in 2025. This marks the first time Lebanon could potentially score positive growth rates since 2018.
The report did not clarify what it believes the drivers of growth would be.
Lebanon continues to suffer the consequences of one of its most severe economic crises, with the GDP per capita dropping by 36.5 percent between 2019 and 2021, according to the World Bank.
Meanwhile, the World Bank is not producing a forecast for the Lebanese GDP in 2024, due to what it called “high uncertainty.” It had initially forecast growth of 0.2 percent in 2023 before the war in Gaza broke out, in the latest edition of its Lebanon Economic Monitor report.
The UN DESA has, in contrast, estimated the GDP to have shrunk by 0.2 percent in 2023, compared with a null growth in 2022.
Lebanon scored these results in 2023 "despite the strong recovery in tourism" over the summer, and the large remittances sent by Lebanese expats to their relatives in the country, which helped "sustain domestic consumption," the report noted. Still, "the country continues to suffer from a lack of basic services, deteriorating infrastructure, the prevalence of several exchange rates and institutional weaknesses."
UN DESA added that "growth prospects for many developing countries, particularly vulnerable and low-income countries, have remained weak, making full recovery from the losses caused by the [COVID-19] pandemic increasingly difficult." The report also notes that inflation in Lebanon reached 230.4 percent in 2023 and is expected to fall to 78 percent in 2024 and 30.7 percent in 2025 due to the sharp depreciation of the exchange rate.
At a global level, and due to a "context of persistent crises and uncertainties," the report forecast a slowdown in world growth from 2.7 percent in 2023 to 2.4 percent in 2024. This should improve slightly to 2.7 percent in 2025.
"Although the global economy avoided the worst-case scenario of a recession in 2023, a prolonged period of low growth is still on the horizon," noted the UN.