The World Bank released its Lebanon Macro Poverty Outlook report in which it estimated Lebanon’s economy to have contracted by 0.8% in 2023, 0.6% in 2022 and 7.0% in 2021, projecting a further contraction of 1.0% in 2024. The World Bank noted that while the economic contraction was slated to bottom out in 2023 following five years of sharp economic contractions totaling 34%, the propagation of the conflict in the last quarter of the year had a negative effect on the economy driving growth into negative grounds at 0.8%. This effect persisted throughout 2024, with the economy projected to contract by another 1.0%, before the significant escalation of the conflict in September 2024, noting that the main spillover of the conflict was on the tourism sector, one of the remaining pillars of the economy. On the fiscal front, the World Bank anticipated the fiscal surplus of 2023 (0.5% of GDP) to extend throughout the year 2024 (projected at 0.2% of GDP). In figures, government revenues stood at 13.7% of GDP in 2023 (bolstered by the adjustment of tax and customs’ rates to reflect the devaluation of the exchange rate), while expenditures leveled at 13.2% (restrained by the halt in budget financing as of the second half of the year 2023). In a similar vein, and while the 2024 budget expects a zero deficit, the World Bank anticipates government revenues to exceed budgeted ones driven by better tax collections, and thus a total surplus of 0.2% of GDP. The report commented that the exchange rate has been stable at LBP 89,500 per USD since mid-2023, as the increased fiscal revenues and the lack of need to finance the budget (given the spending limits on ministries) have led to a 31.2% contraction in money supply. In a related context, the report pointed out that the halt of the Sayrafa platform and the aforementioned restriction on budget financing have led to a $546 million increase in gross reserves at the Central Bank during the first five months of 2024 to $10.2 billion. The World Bank added that the stabilization of the exchange rate has yielded a decrease in the overall inflation, with inflation averaging 1.2% on a monthly basis over the August-December 2023 period (except for the month of October which witnessed a huge spike due to the six-fold increase in the education component). Similarly, annual inflation has ebbed to double-digit figures starting March 2024, after hovering in three-digit territory ever since the month of July 2020. The World Bank noted that despite the harsh economic crisis, Lebanon’s current account deficit remained negative at 28.1% of GDP in 2023, dragged partly by the war’s impact on tourism receipts. Finally, and as far as the outlook is concerned, the World Bank anticipates the aforementioned 1.0% projected economic contraction for 2024 to worsen following the huge escalation of the conflict with inflation expected to drop to a yearly average of 45%.