As the year comes to an end, LIMS was asked by several media outlets to shed light on the most prominent economic developments that occurred in Lebanon over the course of year 2022. LIMS explained that (1) the Lebanese pound (LBP) lost half of its value and the exchange rate against the dollar doubled from about 20,000 LBP at the beginning of the year to over 40,000 LBP by the year’s end. The devaluation was accompanied with increased inflation and rising prices, further diminishing the Lebanese people’s purchasing power, particularly those whose salaries are based in LBP, as they went under the poverty line. (2) Lebanon is still going through a hard recession with an economic growth       of -5%. This is the 5th consecutive year of negative growth. (3) Lebanon fell short of balancing the budget and ended up increasing the fiscal deficit dramatically, while also increasing taxes. The deficit is due to the decision to increase public sector employees’ salaries by threefold. Higher taxes will delay the recovery and the fiscal deficit will fuel further inflation and currency devaluation. 

As for the expectations for the year 2023, LIMS predicted a further collapse of the exchange rate due to the continuous increase of currency in circulation. In addition to that, the 2023 budget will not be issued before the end of 2023. Concerns remain about the official exchange rate, the future of customs dollars, and potential tax increases. LIMS stated that reaching an agreement with the International Monetary Fund remains a top priority for the caretaker government. Lebanon has already implemented several reforms to facilitate this agreement in 2022, but further steps such as capital controls, bank restructuring, and solutions for depositors’ money and banks’ audits are still required by the IMF. LIMS stressed the importance of opening the banking sector to competition allowing new foreign banks to enter the market. 

LIMS Media Interviews:

• After All That We Have Been Through, What Awaits Us Economically And Financially In 2023? December 22, 2022: MTV, TV Interview AR 
• What Awaits Us In The Year 2023? December 23, 2022: Janoubia: TV Interview AR 
• 2022 Worst In Global And Lebanese Economy. Are There Any Expectations Of Further Collapse Of The Exchange Rate Of The Lebanese Pound?! December 27, 2022: El Nashra, Article AR 
• 2022 The Worst, And Expectations Of More Economic And Monetary Collapses, December 28, 2022: Al Liwaa, Article AR 
• How Were The Economic Policies In 2022? December 31, 2022: VDL, Radio Interview AR