Lebanon’s economy has operated under sustained pressure for several years. The country has a public debt-to-gross domestic product ratio of about 160%, one of the highest in the world. Badly in need of economic reform and infrastructure investment, progress has been stymied by political paralysis and widespread corruption. The presence of up to 2 million refugees fleeing the war in neighbouring Syria, adding to a domestic population of just over 6 million, has stretched the economy to breaking point.
If such a backdrop were not bleak enough, in 2019 the country’s woes have become increasingly pronounced. Particularly alarming is a slowdown in incoming foreign deposits, traditionally the lifeblood of the economy, during the first half of the year. Tighter supplies of US dollars have put pressure on the local currency’s peg to the US dollar, with reports emerging of a rising black market in currency exchange for the first time.
