The World Bank has ranked Lebanon among the countries with the worst economic crises recorded over the past one-and-a-half century.
“The Lebanon financial and economic crisis is likely to rank in the top 10, possibly top three, most severe crises globally since the mid-nineteenth century,” the World Bank said in a report published on Tuesday.
The report, titled “Lebanon Sinking (to the Top 3),” said that Lebanon’s crisis has contrasted with the most severe global crisis episodes observed between 1857 and 2013.
In 2020, Lebanon’s GDP was estimated at $33 billion, the U.S. dollar GDP per capita falling by nearly 40% compared to its value in 2018, when Lebanon’s GDP stood at $55 billion.
“Such a brutal and rapid contraction is usually associated with conflicts or wars,” the report said.
Lebanon has been reeling from a severe economic meltdown since late 2019 when the Lebanese pound began to drop against the U.S. dollar.
As the situation deteriorated, banks locked people out of their deposits as inflation took effect and prices soared, while hard currency, once abundant, gradually leaked out of the local market.
The crisis has since continued to pull more Lebanese below the poverty line, amid a political vacuum that has only exacerbated the situation and blocked the road toward recovery.
The World Bank‘s report warned that the social impact of the crisis, which is already dire, “could rapidly become catastrophic.”
It noted the lack of a “clear turning point on the horizon,” bashing what it called “the disastrous deliberate policy inaction.”
“Lebanon, with a history of civil war and conflicts, faces realistic threats to its already fragile social peace,” the World Bank warned.