The World Bank released its Macro Poverty Outlook report in which it estimated Lebanon’s economic growth at negative 0.5% in 2023 following a contraction of 2.6% in 2022 (vs an estimated 5.4% previously owing to better than expected economic data especially on the tourism front) amidst the continued absence of any structural reforms, a trend which is assumed to persist in 2023. In this regard, the report commented that the GDP contraction over the 2018-2022 period has eroded more than 15 years of economic growth. The World Bank added that the exchange rate continued its downward trend in 2022 leading to triple digit inflation rates, eroding as such the purchasing power of those whose income is in LBP. The World Bank pointed out that Lebanon continues to suffer from a deep institutional vacuum, amid the failure to elect a new president since October 2022 and the government being in a caretaker status. The World Bank revealed that the failure to resolve the issue of the losses of the financial sector (estimated at $72 billion, i.e. more than three times the GDP of 2021) has been further aggravating the crisis. According to the World Bank, the bulk of the burden of the crisis is being borne by the poor, with poverty levels rising and three out of every five households labelling themselves as poor or very poor according to a recent survey, especially those not receiving remittances from abroad. Always on this front, the report indicated that while employment rates have been rising, a sizeable share of the population has been working in low quality jobs. In parallel, and on the public finances front, Lebanon registered a narrow fiscal surplus of around 0.3% of GDP in 2022, as expenditures contracted at a faster pace than revenues. In details, government revenues fell from 13.1% of GDP in 2020 to 6.0% in 2022 (one of the lowest globally), with expenditures shrinking by 16.4 percentage points to 5.7% of GDP in 2022. The report mentioned that despite BDL’s large FX interventions, the average black market exchange rate averaged LBP 31,102 per USD during 2022. The report added that by February 2023, the local currency lost more than 98% of its pre-crisis value, breaching the LBP 80,000 per USD level, with the multiple exchange rate phenomena persisting, while also pointing out that the official exchange rate was adjusted to LBP 15,000 per USD (from LBP 1,507.5 per USD previously), a first such move since 1997.  With regards to inflation, the World Bank estimated the average change in the consumer price index at 171.2% in 2022 (due to the depreciation of the Lebanese pound) mainly fueled by the 240% increase in the prices of food and non-alcoholic beverages. In addition, the World Bank expected inflation to average 165% in 2023. The report also pointed to the continued depletion of foreign exchange reserves, which contracted by $22.75 billion since the onset of the crisis to $15.19 billion (including some $4.80 billion in foreign securities) at end of 2022.  The World Bank added that uncharacteristically for a country lingering in a protracted crisis and in a state of sovereign default, Lebanon continues to suffer from a current account deficit. In figures, imports increased by 39.7% in 2022 to near a pre-crisis level of $19 billion while exports contracted by 10.2%. The report attributed the hike in imports to the anticipated hike in customs duties by end of 2022. On another note, the report commented that little progress has been made on reform implementation since the signing of the conditional IMF $3 billion facility in April last year, with the ongoing political impasse (presidential and government voids) possibly delaying the implementation of such reforms by a couple of months.