Lebanese economy on course for muted recovery in 2015

Significance

According to its Global Economic Prospects report, the bank forecast a modest increase in GDP growth in 2015 to 2.0%, up from an estimated 1.5% in 2014. Since 2011, the economy has been affected by violent spillover from the Syrian conflict, most notably the arrival of over one million Syrian refugees in the country. The Interior Ministry sought to control the conflict's negative impact on security and economy by introducing on January 5 new stricter visa regulations for Syrian nationals, in effect ending Lebanon's 'open door' policy. However, the sharp fall in global oil prices promises some relief for the economy in 2015.

Impacts

• Lebanon's security problems and political deadlock will persist absent improvement in the Syrian conflict or Saudi-Iran relations.
• The oil price drop will translate into a drop in consumer prices, reducing the risk of social unrest.
• However, the new border controls and attacks attributed to Syrians could spark protests, and clashes between refugees and Lebanese.
• Development of Lebanon's hydrocarbon resources will be delayed until the political crisis is resolved.