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One of the key issues facing Lebanon is the economic and social impact of the Syrian crisis, now entering its fifth year. Over one million Syrians, about a quarter of the Lebanese population, have taken refuge in Lebanon since the conflict started in March 2011, straining public finances, service delivery and the environment. The crisis is also expected to worsen poverty incidence among Lebanese as well as widen income inequality. In particular, it is estimated that as a result of the Syrian crisis, some 170,000 additional Lebanese have been pushed into poverty (above the current 1 million) by the end of 2014, an additional 220,000 to 320,000 Lebanese citizens are estimated to have become unemployed, most of them unskilled youth.
Within this challenging environment, GDP growth in Lebanon is estimated at 2.0% in 2014 up from an estimated 0.9% in 2013, in part driven by the Central Bank’s stimulus package, an improved security stance and lower oil prices. With the economy operating below capacity, and given lower international commodity prices (oil in particular), inflation has sharply decelerated in 2014 to 1.2%. The fiscal deficit narrowed in 2014 but solely due to one-off factors; public finances remain structurally weak and worsening and in urgent need of reforms. Public debt (as a ratio of GDP) continued to rise (to 145.6% of GDP at end-2014), due to low growth and a relatively high cost of debt financing.
Source: World Bank Updated: September 2015
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