Lebanon’s gross domestic product (GDP) has surged to $33 billion in 2024, according to new estimates by the International Monetary Fund (IMF), marking a sharp increase from previous local assessments. The revised figure comes amid ongoing discussions between an IMF delegation and Lebanese authorities regarding the country’s economic outlook.

The IMF delegation, currently visiting Lebanon, is expected to present updated GDP projections, challenging long-standing estimates that placed Lebanon’s economy at between $16 billion and $20 billion. These lower estimates had been used as a reference since the country’s financial crisis erupted in 2019, leading to a contraction in GDP from over $50 billion.

The new IMF estimate of $33 billion for 2024 reflects a substantial revision from its earlier assessment of $16.2 billion for 2023, which was based on an assumed exchange rate depreciation to 140,000 Lebanese pounds per U.S. dollar. In October 2024, the IMF adjusted its 2023 GDP estimate to $24 billion, reflecting a revised exchange rate of 89,700 pounds per dollar. While official IMF forecasts for 2024 and 2025 have not yet been published, the organization’s internal estimates, set to be communicated to Lebanese officials, indicate that GDP has reached $33 billion this year.

Economic Growth and the Cash Economy

The significant revision in Lebanon’s GDP reflects the expansion of the country’s cash economy, which has made economic assessments increasingly difficult. Since 2019, the widespread shift from banking transactions to cash dealings has disrupted financial tracking, leading to inaccuracies in GDP estimates.

With the majority of commercial transactions now occurring outside the banking sector, authorities lack precise data to monitor financial flows and economic activity. The IMF delegation is expected to emphasize the need for updated methodologies in calculating Lebanon’s economic indicators.

Lebanon’s GDP estimates have fluctuated sharply in recent years. IMF data shows that GDP fell from $50.9 billion in 2019 to $25 billion in 2020, before dropping further to $19.8 billion in 2021. The economy saw some recovery, reaching $24.5 billion in 2022 and stabilizing at $24 billion in 2023 before the latest surge in 2024.

Meanwhile, inflation has soared, rising from 2.9% in 2019 to 84.9% in 2020, 154.8% in 2021, 171.2% in 2022, and reaching 221.3% in 2023, reflecting the broader economic instability.

Lebanon Ranks First in Gold Reserves-to-GDP Ratio

In a separate development, a study by Garbis Iradian, Chief Economist at the Institute of International Finance, has found that Lebanon now ranks first globally in terms of gold reserves as a percentage of GDP. The country’s gold reserves, valued at $27 billion, represent 76.5% of its GDP— the highest ratio worldwide.

The study found that Lebanon has overtaken Uzbekistan, which holds $32 billion in gold reserves and a GDP of $127 billion, giving it a gold-to-GDP ratio of 25.2%. Kyrgyzstan follows with 18.4%, while Jordan ranks fourth at 10.7%.

Among major economies, Germany ranks 12th globally with a ratio of 5.7% and gold reserves valued at $281 billion. Saudi Arabia ranks 31st with reserves worth $30 billion and a ratio of 2.7%. The United States, despite possessing the world’s largest gold reserves at $682 billion, ranks 33rd with a gold-to-GDP ratio of just 2.2%.

The revelation that Lebanon leads the world in gold reserves relative to GDP is expected to reignite debate over whether the country should consider liquidating part of its reserves to support an economic recovery plan. With Lebanon’s financial crisis ongoing and the formation of a new government still uncertain, the question of whether gold reserves should be used as part of a broader economic rescue strategy remains a contentious issue.

This is an English adaptation of an article originally published in Asharq Al-Awsat.