Lebanon

Lebanon

Lebanon: Market Profile

Major Economic Indicators

Table: Major Economic Indicators (Lebanon)
Table: Major Economic Indicators (Lebanon)
  • Lying at the eastern end of the Mediterranean Sea, with Syria to the north and Israel to the south, Lebanon has been at the centre of many Middle East conflicts. Following the 1975-90 civil wars, its government stockpiled debt on account of its bid to reconstruct its damaged infrastructure. More recently, the Syrian crisis has aggravated Lebanon’s economic plight, with the country receiving an estimated total of 1.5 million refugees since 2011. This has further widened fiscal deficits and intensified social unrest.
  • The Lebanese economy is service-oriented with the country functioning as a financial hub for the Middle East, thanks in part to its free market system and banking secrecy laws. Services account for about 70% of Lebanon’s GDP, followed by industry (25%) and agriculture (6%). The banking sector is the main contributor to fiscal receipts and has continued to expand despite the Syrian civil war. On the downside, tourism, another driver of growth, has also suffered greatly, with visitor numbers shrinking by 28% between 2010 and 2016. In addition, continual power shortages are further hindering economic development.
  • The election of President Michel Aoun in October 2016 after a presidential vacancy of more than two years, along with the subsequent formation of a unity government, is seen as helping political stability and conducive for a recovery in inward FDI. Yet, a number of the major economic reforms in Lebanon have been put on hold in light of the Syrian war and the continual violence in the country.
  • Development in Lebanon’s industrial sector has been restricted by limited development in industrial policy, limited electricity coverage, and the high cost of production, as well as the adverse effect caused by the Syrian conflicts, which have considerably reduced inward FDI and curtailed Lebanon’s sole land export route to the region.
  • Lebanon’s central bank continued its stimulus package during Q1 2017 with subsidised loans provided to key sectors such as industry, agriculture and technology in order to spur growth. Following its latest consultation with Lebanon, the IMF recommended a consolidation strategy under which Lebanon should work towards fiscal consolidation while putting its debt repayments on a sustainable path.
  • Lebanon is a net energy importer and has benefited from the drop in oil prices. The country import mineral fuels, electrical/electronic and pharmaceutical goods as well as cars, mostly from China, Italy, France, the US and Germany, while exporting jewellery, chemicals and consumer goods, mostly to South Africa, the Gulf states and Switzerland.
  • Lebanon is a member of the WTO and the Greater Arab Free Trade Area (GAFTA). Its import tariffs are among the lowest in the Middle East and North Africa (MENA) (under 5% for most items). It has signed free trade agreements with many trade blocs, including the EU, European Free Trade Association, Gulf Co-operation Council (GCC) and the Mercosur. In April 2016, Lebanon joined the Agadir Free Trade Agreement (AFTA) to gain greater access to the EU market (other AFTA members include Egypt, Jordan, Morocco, Tunisia and Palestine). Lebanon has expressed a keen interest in China’s Belt and Road Initiative, seeing itself as a gateway to the Arab world. Many leading Chinese enterprises, including Huawei, Great Wall Motor and Geely, have already set up operations in the country.
  • The Investment Development Authority of Lebanon (IDAL) is the investment promotion agency of Lebanon. Focused sectors for investment promotion include agriculture, agro industry, industry, information technology, media, technology, telecom and tourism. Information on investment climate and incentives provided is available on IDAL’s website.
  • Despite continual regional disturbances, inward FDI increased by 9% to US$2.56 billion in 2016. Cumulative FDI reached US$61 billion as of 2016, up from US$44.3 billion in 2010. According to China’s Ministry of Commerce, China’s FDI stock in Lebanon in the period of 2010-2015 almost doubled from US$2.01 million to US$3.78 million.
Table: Hong Kong Trade with Lebanon
Table: Hong Kong Trade with Lebanon

More Information

More information on the Belt and Road countries’ economic and investment environment, tax and other subjects that are important in considering investment and doing business are available in The Belt and Road Initiative: Country Business Guides.


Saudi Arabia - Waterfront Project

Middle East
Location: Lebanon, Saudi Arabia
Sectors: City Planning
Capital Required (USD):
$ 65,000,000,000