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Lebanon Economy 1999

    Economy—overview: The 1975-91 civil war seriously damaged Lebanon's economic infrastructure, cut national output by half, and all but ended Lebanon's position as a Middle Eastern entrepot and banking hub. Peace has enabled the central government to restore control in Beirut, begin collecting taxes, and regain access to key port and government facilities. 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. Lebanon's economy has made impressive gains since the launch of "Horizon 2000," the government's $20 billion reconstruction program in 1993. Real GDP grew 8% in 1994 and 7% in 1995 before Israel's Operation Grapes of Wrath in April 1996 stunted economic activity. 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 central business district; the 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 LAHUD government. The stalled peace process and ongoing violence in southern Lebanon could lead to wider hostilities that would disrupt vital capital inflows. Furthermore, the gap between rich and poor has widened in the 1990's, resulting in grassroots 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.

    GDP: purchasing power parity—$15.8 billion (1998 est.)

    GDP—real growth rate: 3% (1998 est.)

    GDP—per capita: purchasing power parity—$4,500 (1998 est.)

    GDP—composition by sector:
    agriculture: 4%
    industry: 23%
    services: 73% (1997 est.)

    Population below poverty line: NA%

    Household income or consumption by percentage share:
    lowest 10%: NA%
    highest 10%: NA%

    Inflation rate (consumer prices): 5% (1998 est.)

    Labor force: 1 million
    note: in addition, there are as many as 1 million foreign workers (1996 est.)

    Labor force—by occupation: services 62%, industry 31%, agriculture 7% (1997 est.)

    Unemployment rate: 18% (1997 est.)

    revenues: $4.9 billion
    expenditures: $7.9 billion, including capital expenditures of $NA (1998 est.)

    Industries: banking; food processing; jewelry; cement; textiles; mineral and chemical products; wood and furniture products; oil refining; metal fabricating

    Industrial production growth rate: 25% (1993 est.)

    Electricity—production: 8.4 billion kWh (1997 est.)

    Electricity—production by source:
    fossil fuel: 87.72%
    hydro: 12.28%
    nuclear: 0%
    other: 0% (1996)

    Electricity—consumption: 6.01 billion kWh (1996)

    Electricity—exports: 0 kWh (1996)

    Electricity—imports: 310 million kWh (1996)

    Agriculture—products: citrus, grapes, tomatoes, apples, vegetables, potatoes, olives, tobacco, hemp (hashish); sheep, goats

    Exports: $711 million (f.o.b., 1997)

    Exports—commodities: foodstuffs and tobacco 20%, textiles 12%, chemicals 11%, metal and metal products 11%, electrical equipment and products 10%, jewelry 10%, paper and paper products 8% (1997)

    Exports—partners: Saudi Arabia 14%, UAE 9%, France 7%, Syria 6%, US 6%, Kuwait 4%, Jordan 4%, Turkey 4%

    Imports: $7.5 billion (c.i.f., 1997)

    Imports—commodities: foodstuffs 29%, machinery and transport equipment 28%, consumer goods 18%, chemicals 9%, textiles 5%, metals 5%, fuels 3%, agricultural foods 3% (1997)

    Imports—partners: Italy 13%, US 9%, France 9%, Germany 8%, Switzerland 7%, Japan 4%, UK 4%, Syria 4% (1997)

    Debt—external: $3 billion (1998 est.)

    Economic aid—recipient: $3.5 billion (pledges 1997-2001)

    Currency: 1 Lebanese pound (�L) = 100 piasters

    Exchange rates: Lebanese pounds (�L) per US$1—1,508.0 (January 1999), 1,516.1 (1998), 1,539.5 (1997), 1,571.4 (1996), 1,621.4 (1995), 1,680.1 (1994)

    Fiscal year: calendar year

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Revised 1-Mar-99
Copyright © 1999 Photius Coutsoukis (all rights reserved)