Towards a Sustainable Recovery for Lebanon's Economy

Ricardo Hausmann, Ugo Panizza, Carmen Reinhart, Douglas Barrios, Clement Brenot, Jesus Daboin Pacheco, Clemens Graf von Luckner, Frank Muci and Lucila Venturi
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Clement Brenot: Center for International Development at Harvard University
Frank Muci: Center for International Development at Harvard University

No 439, CID Working Papers from Center for International Development at Harvard University

Abstract: Lebanon’s current economic crisis ranks among the worst in recent history. GDP has collapsed by 38% in real terms. The Lebanese lira, which was fixed to the dollar in 1997, has lost more than 98% of its value on the parallel market. The government has defaulted on its debt, and depositors are unable to access their funds held at commercial banks. Consolidated public sector debt, including both government debt and commercial banks’ claims on the Banque du Liban (BdL), represents more than seven times the current GDP. Public services delivery has crumbled. In short, the country is undergoing a debt crisis, a banking crisis, a currency crisis, and a growth collapse. Four years into the crisis, a resolution remains elusive, and each passing day increases the economic and social burdens faced by the population. Given the increasing cost of delaying a resolution, we propose a strategy for Lebanon’s economic recovery that addresses all the dimensions of the crisis while recognizing the need to rapidly kick-start the economic recovery.

Keywords: Lebanon; sovereign debt; international finance (search for similar items in EconPapers)
Date: 2023-11
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Working Paper: Towards a Sustainable Recovery for Lebanon's Economy (2023)
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