Towards a Sustainable Recovery for Lebanon’s Economy
Since 2019, Lebanon has experienced one of the worst economic meltdowns in recent history. GDP has collapsed close to 40% in real terms, while the local currency has lost 98% of its value. The government defaulted on its external debt, and depositors have been unable to access their funds held at local banks. Public services have crumbled and poverty has become rampant.
Yet, four years later, a resolution remains elusive and each passing year compounds the economic and social hardships faced by the population.
As part of its research agenda on growth collapses, the Growth Lab assembled a world-class research team to assess the situation in all its dimensions, study the mechanics behind the crisis, and most importantly suggest a credible way out of the crisis.
A Strategy for Lebanon's Economic Recovery
In this report, we propose a strategy for Lebanon’s economic recovery that addresses all the dimensions of this crisis while recognizing the need to rapidly kick-start the economic recovery. The four-point plan involves: transitioning to a monetary system based on full dollarization; a bank restructuring plan to resolve the insolvency issue and revive the banking system; debt restructuring and gradual fiscal consolidation; and a strategy for new drivers of growth.
In this short video, Ricardo Hausmann outlines our strategy for Lebanon's recovery.
