Growth at last, strength still missing: Lebanon's economic reality

Report by Theresia Rahme, English Adaptation by Yasmine Jaroudi

Lebanon recorded economic growth of around 5% in 2025, its first positive growth rate in more than 15 years, a figure that may appear encouraging at first glance but requires careful interpretation.

The growth comes after a severe contraction in 2024, when the economy shrank by about 7%, reflecting the weakness of overall economic activity. As a result, the improvement seen in 2025 is measured against an exceptionally low base, making the rebound appear stronger than it is in real terms.

Analysts compare the situation to an economy that suffered a major shock and then managed to take a small step forward. While the step may look significant, the economy remains fragile and far from regaining its strength.

Growth figures are calculated by comparing one year to the previous one, meaning the 5% increase in 2025 reflects a modest improvement from a deeply negative year rather than a return to robust economic health. Despite the uptick, overall economic performance remains below pre-crisis levels.

By comparison, between 2011 and 2017, Lebanon recorded growth rates that rarely exceeded 2%. Yet, those figures were considered relatively normal at the time because the size of the economy was significantly larger than it is today.

Lebanon's gross domestic product is currently estimated at about $33 billion, up from roughly $20 billion last year, pointing to a degree of recovery. 

However, the economy remains well below its previous peak of around $55 billion, underlining how much ground still needs to be covered before Lebanon can be said to have achieved a genuine and sustainable recovery.