Attachments
Lebanon continues to grapple with overlapping crises that have severely constrained recovery and heightened vulnerability. Since 2019, the country has faced a sovereign default, financial sector collapse, and triple-digit inflation, resulting in a cumulative Gross Domestic Product (GDP) contraction of 40 per cent. The Lebanese Pound lost substantial value, triggering a liquidity crisis that eroded savings and wages. These conditions drove widespread hardship, high unemployment, and the breakdown of public services.
Signs of stabilization appeared in 2025, with inflation falling to double digits for the first time since the crisis began and the exchange rate stabilizing at LBP 89,700 per USD since late 2023. GDP growth is projected at 3.5 percent for 2025, revised down from 4.7 percent due to regional tensions and slow reform progress. However, fiscal space remains extremely limited: the 2025 budget excludes debt servicing and lacks resources for large-scale recovery or social protection. Lebanon remains in selective default, and progress toward an International Monetary Fund (IMF) program is slow despite recent legal reforms.
Inflation, while lower than previous years, continues to strain households. The Survival Minimum Expenditure Basket (SMEB) for a family of five reached $509 in September 2025, up 16 percent year-on-year, while the food SMEB per person rose to $40.4 (+12 percent). The non-food SMEB increased by 19 percent, driven by electricity, healthcare, and rent costs, particularly in displacement-affected areas. Lebanon’s labor market remains highly fragile, with formal employment disrupted by the prolonged economic crisis and the 2023–2024 conflict, forcing a shift toward informal, insecure work that undermines household economic capacity impacting particularly low-income households and refugees.
Poverty remains severe, with about 44 per cent of Lebanon’s population and 33 per cent of Lebanese citizens living in monetary poverty. Multidimensional poverty is even higher - 73 per cent of Lebanese and nearly all non-Lebanese residents (UN ESCWA, 2024; World Bank, 2024).
The ceasefire in southern Lebanon since November 2024 remains in place but is fragile, with sporadic airstrikes and shelling along border areas and restricted access in some localities.
Recovery from the 2023–2024 conflict is still slow, and displacement pressures persist, with 986,000 IDPs having returned but 64,000 still displaced, alongside 120,000 post-2024 arrivals.