Ekonomisk riskbedömning


Population 4.5 million
GDP 11157 US$
Country risk assessment
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major macro economic indicators

   2014 2015 2016(f) 2017(f)
GDP growth (%) 2.0 1.0 1.0 2.0
Inflation (yearly average) (%) 1.8 -3.7 -0.7 2.0
Budget balance (% GDP)* -5.9 -7.3 -8.0 -9.4
Current account balance (% GDP) -28.0 -20.9 -20.3 -20.5
Public debt (% GDP) 133.3 138.4 143.8 149.1


(f) Forecast


  • Healthy banking system.
  • Financial support from its diaspora and the international community,
  • Discovery of offshore natural gas fields.


  • Political factionalism around religious beliefs and serious political differences around the Syrian issue.
  • Exposure to regional geopolitical tensions.
  • Very high public debt.

Risk assessment

New President elected in 2016

After a 29 month political stalemate that paralysed the country, Lebanon elected General Aoun as a new President. This former career soldier and Hezbollah supporter is the third General to become head of state and succeeded Michel Sleiman whose term of office ended in May 2014. General Aoun’s candidature was supported by his two main rivals, the Christian head of the Lebanese Forces (LF) Samir Geagea and the former Sunni Prime Minister Saad Hariri, both unsympathetic to the Syrian President, Bashar al-Assad, and his Hezbollah allies in Lebanon. His election is expected to allow the country to emerge from its political vacuum and economic paralysis which served to highlight major issues in terms of political patronage and corruption. On 7 November 2016, Saad Hariri, leader of the Future Movement party, was appointed Prime Minister. His task will be to form a government that can represent all the various political movements in Lebanon.


Recovery in 2017

Growth in 2016 was no more than 1% and was evidence of the difficulties faced by the economy during the institutional paralysis and the spillovers of the Syrian crisis. There should however be a slight upturn in economic activity in 2017 following the election of President Aoun. The normal drivers of Lebanese growth, financial services, tourism and property, will however continue to suffer as a result of low levels of confidence in households and companies. Exports, with the loss in competitiveness of the Lebanese pound, are likely to continue on a downwards path but could rapidly improve if a solution were to emerge in the Syrian conflict. Investments, and particularly in real estates, are at a very low level because a loss of appetite among foreign and expatriate. Lebanese investors suffering as a result of the slowdown in the Gulf Cooperation Council zone. Following the allocation of one billion dollars to boost bank credit, the Lebanese Central Bank is expected to continue initiatives to support activity. It could however be obliged to increase its rates following increases in US rates. Household consumption, which accounts for 80% of growth, will once again be the crucial factor in sustaining economic activity. The momentary deflationary episode, resulting from economic weakness and falling wages because of the influx of Syrian refugees, is expected to be replaced by a moderate increase in inflation in 2017.


Large twin deficits and increasing debt levels

After improving in 2016, the public deficit is expected to worsen further in 2017. The reduction in transfers to Electricité du Liban, which continues to feel the benefits of lower oil prices, has resulted in a reduction in public spending.  This will however only partly make up for the very slow growth in public revenues. Whilst the primary balance remained in surplus in 2016, the increase in the debt servicing charge, following the strengthening of the US dollar has led to a further deterioration in the public accounts. In 2017, debt servicing will continue to have a negative impact on the public finances. The room for budget manoeuvre available to the new government of Saad Hariri is thus likely to remain limited at the same time as it faces a variety of challenges. The political vacuum of the last two years delayed the implementation of any reforms aimed at improving the public finances at the same time as the debt ratios were worsening. Public debt, which was in excess of 140% of GDP in 2016, is likely to increase by more than 7 percentage points in 2017. Essentially domestic, a large portion of it is held by the local banks. The viability of the debt therefore depends on the ability of the banking system to attract dollar deposits. At the same time, the high level of exposure of the Lebanese banking system to the public debt increases the systemic risk linked to a sovereign default.

The significant current account deficit will continue in 2017. The effect of low oil and gas prices on imports will continue to be offset by the fall in exports. The balance of services will however improve thanks to the financial services sector. Remittances from workers abroad and FDI will continue to suffer from weaker economic activity on the GCC countries. Following a financing package of the Banque du Liban central bank, currency reserves have been increased and are equal to 15 months’ of imports.


Last update: January 2017

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