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 Prime Minister HARIRI launched his $18 billion "Horizon 2000" 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 1992-97, annual inflation fell from more than 170% to 9%, and foreign exchange reserves jumped to more than $4 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. 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 since HARIRI took office, 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 - $15.2 billion (1997 est.)

GDP - real growth rate 4% (1997 est.)

GDP - per capita purchasing power parity - $4,400 (1997 est.)

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

Inflation rate - consumer price index 9% (1997 est.)

Labor force
total: 1 million plus as many as 1 million foreign workers (1996 est.)
by occupation: services 62%, industry 31%, agriculture 7% (1997 est.)

Unemployment rate 18% (1997 est.)

Budget
revenues: $2.4 billion
expenditures: $5.9 billion, including capital expenditures of $NA (1997 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 - capacity 1.35 million kW (1997)

Electricity - production 5 billion kWh (1995)

Electricity - consumption per capita 1,380 kWh (1995)

Agriculture - products citrus, vegetables, potatoes, olives, tobacco, hemp (hashish); sheep, goats

Exports
total value: $1.018 billion (f.o.b., 1996)
commodities: paper and paper products 26%, food stuffs 16%, textiles and textile products 10%, jewelry 8%, metals and metal products 8%, electrical equipment and products 8%, chemical products 6%, transport vehicles 4% (1995)
partners: UAE 23%, Saudi Arabia 14%, Kuwait 8%, Syria 7%, Jordan 5%, France 5%, Italy 4%, US 3% (1996)

Imports
total value: $7.559 billion (c.i.f., 1996)
commodities: machinery and transport equipment 28%, foodstuffs 20%, consumer goods 19%, chemicals 9%, textiles 5%, metals 5%, fuels 3% (1995)
partners: Italy 12%, US 11%, Germany 9%, France 8%, Syria 4%, UK 4%, Japan 4% (1996)

Debt - external $2.3 billion (1997 est.)

Economic aid
recipient: aid pledges of $3.5 billion for 1997-2001

Currency 1 Lebanese pound (£L) = 100 piasters

Exchange rates Lebanese pounds (£L) per US$1 - 1,526.1 (January 1998), 1,539.5 (1997), 1,571.4 (1996), 1,621.4 (1995), 1,680.1 (1994), 1,741.4 (1993)

Fiscal year calendar year

NOTE: The information regarding Lebanon on this page is re-published from the 1998 World Fact Book of the United States Central Intelligence Agency. No claims are made regarding the accuracy of Lebanon Economy 1998 information contained here. All suggestions for corrections of any errors about Lebanon Economy 1998 should be addressed to the CIA.