Poverty in Lebanon has more than tripled over the past decade, with the percentage of people living below the poverty line increasing from 12% in 2012 to 44% in 2022, according to a report from the World Bank. This surge in poverty was largely driven by the country’s financial crisis, which began in 2019 and saw Lebanon’s currency collapse, inflation soar, and GDP plummet. As a result, many Lebanese citizens lost their life savings as the value of their assets evaporated.
The World Bank report offers a detailed snapshot of the economic situation in Lebanon, based on surveys conducted in five of the country’s eight governorates. The findings revealed stark disparities in poverty levels between different regions and between Lebanese citizens and Syrian refugees. While poverty declined in Beirut, it surged in neglected areas like Akkar. Among Lebanese citizens, the poverty rate in 2022 stood at 33%, while among Syrian refugees, it soared to 87%.
The report also highlighted the prevalence of multidimensional poverty in Lebanon, taking into account factors like access to services, education, and income. According to this metric, around 73% of Lebanese residents and 100% of non-Lebanese residents in the country are considered poor. The influx of Syrian refugees has further strained Lebanon’s resources, as many are forced to work in unskilled labor jobs, intensifying competition in already struggling sectors.
While an International Monetary Fund (IMF) bailout was initially seen as a potential solution to Lebanon’s crisis, progress on necessary reforms has been limited. Despite reaching a preliminary agreement with the IMF in 2022, Lebanese officials have struggled to implement the reforms required to secure the bailout. The IMF has noted some progress in monetary and fiscal reforms, such as lowering inflation and stabilizing the exchange rate, but emphasized that further measures are needed for a sustainable recovery.
The World Bank has raised concerns about the growing cash economy in Lebanon, as citizens increasingly turn to hard currency amid widespread distrust of the banking sector. This shift towards cash transactions has raised fears of money laundering and terrorism financing, prompting warnings that Lebanon could be placed on the Financial Action Task Force’s “grey list” of high-risk countries. Without comprehensive reforms to address governance, transparency, and accountability issues, Lebanon’s economy may continue to struggle, with significant regulatory and supervisory challenges ahead.
