Knowledge Note

"In October 2019, the economy plunged into a financial crisis brought about by a sudden stop in capital inflows, which precipitated banking, debt, and exchange rate crises"

Lebanon’s macroeconomy is in dire straits due to compounded crises. In October 2019, the economy plunged into a financial crisis brought about by a sudden stop in capital inflows, which precipitated banking, debt (including sovereign default), and exchange rate crises. End-March 2020, the Government imposed a lockdown to counter COVID-19. Lastly, on August 4, 2020, a massive explosion rocked the Port of Beirut (PoB), destroying much of the port and severely damaging the dense residential and commercial areas within a 1- to 2-mile radius. Lebanon is in its third government in less than a year.