The World Bank issued a press release on May 30, 2022 in which it summarized the implementation progress under Lebanon’s Country Partnership Framework (CPF) over the fiscal years 2017-2022 at a time when Lebanon is experiencing one of the most severe economic and financial crisis in recent history. The press release added that the CPF period was extended by one additional year to advance urgently needed socioeconomic recovery programs targeting the poor & most vulnerable and support critically needed macroeconomic & structural reforms. According to the World Bank, Lebanon has been undergoing a host of compounded and overlapping crises, namely a harsh financial crisis, the COVID-19 pandemic, the Beirut port explosion and a food security crisis as a result of the war in Ukraine. As such, the World Bank estimated the country’s nominal GDP to have contracted from around $52 billion in 2019 to a projected $21.8 billion in 2021 as a result of the hyperinflationary environment. In addition, the press release noted that the aforementioned crises have aggravated social hardships, thereby disproportionately affecting the poor & vulnerable households. Furthermore, the World Bank mentioned that as a result of political inaction, basic public services are failing, unemployment is rising and human capital is heavily depleted. In parallel, the press release noted that the private sector is suffering from a paralyzed financial system, with firms experiencing lower productivity and revenue generation which, in turn, have led to layoffs and bankruptcies. In this vein, and assuming no policy reform, the World Bank estimates real GDP to contract by 6.5% in 2022.

According to the World Bank Mashreq Regional Director Mr. Saroj Kumar Jha, Lebanon has missed several opportunities to adopt a path to reform its economic and financial system, noting that the cost of inaction is gargantuan on the daily lives of citizens and also on the future of the Lebanese people. Mr. Saroj added that two and half years into the crisis, Lebanon has not yet undertaken a comprehensive reform & recovery program to prevent further deterioration in the country’s condition. The World Bank commented that Lebanon direly needs to adopt a credible, comprehensive and equitable macro-financial stabilization & recovery plan and accelerate its implementation in order to avoid a complete destruction of its social and economic networks and stop the loss of human capital. The press release revealed that significant efforts are needed to advance the governance reform agenda forward in order to mend the broken citizen-state trust relationship. Finally, the World Bank noted that while it continues to channel resources toward projects that directly contribute to saving lives, protecting the poor & vulnerable and preventing the collapse of basic services, it is also preparing a number of strategic analytical & sector studies to identify reforms that can accelerate private sector led recovery and rebuild Lebanon.