A new domestic political stalemate hasdeveloped while spillovers from the Syrian conflict furtherexacerbated. A mid-year lull in the security situation gavea temporary boost to consumer and investor sentiment.Lebanon’s current account deficit remains elevated, albeitlower than during the pre-crisis period. Lebanon’s fiscalposition continues to deteriorate. Banque du Libanmaintained an expansionary monetary stance to support theeconomy, while sustaining confidence in the Lebanese pound.Conservatism in financial regulations and private sectorbanking helped maintain a well-capitalized and resilientdomestic banking sector, despite sluggish growth anddowngrades by international rating agencies. The expandingpolitical stalemate at home and regional spillovers posesignificant downside risk to growth. The Lebanon economicmonitor provides an update on key economic developments andpolicies over the past six months. It also presents findingsfrom recent World Bank work on Lebanon. It places them in alonger-term and global context, and assesses theimplications of these developments and other changes inpolicy on the outlook for Lebanon.
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