Lebanese Sectoral GDP: 2018-2024

Source: CAS; WB

* At constant 2019 prices

** WB projection prior to 9/2024, on 4/2024

Source: CAS; WB

* WB projection prior to 9/2024, on 4/2024

The Central Administration of Statistics (CAS) has published sectoral GDP figures up to 2021 only; it showed GDP to have declined by 29% in real terms (i.e. in terms of 2019 prices) between 2018 and 2021. Similarly, it showed agriculture to have increased by 22.44%, industry to have fallen by 46.03%, and services to have declined also by 27.15%. In addition, the World Bank (WB) produced growth rates for GDP and sectoral output which averaged close to 0% between 2022 and 2024 leaving the figures by 2024 pretty much as they were in 2021, though the estimate for year 2024 was prepared before September 2024 when the war in South Lebanon has taken by that time a more explosive turn with decisive impact on the rest of the economy.

That said, from the two tables above we can derive some interesting conclusions:

• The agricultural sector expanded the most, both in absolute and relative terms, and its share of GDP rose from 2.95% to 5.07% between 2018 and 2024
• Industry, however, fell the most, in both relative and absolute terms, as its share of GDP fell from 87% to 10.46%
• As to services, it depicted quite a curious behavior. It declined in absolute terms, but it rose in relative terms as its share of GDP increased from 83.18% to 84.52%. That it is because the drastic decline in financial services was partially compensated for by a rise in real estate and private health and education.
• The negative impact of the 9/2024 war will be felt in all sectors, but the largest will perhaps be in agriculture as it is a dominant activity in the South. This will claw back some of the gains that agriculture had reaped in 2019-2023.

Lastly, it is surprising that industry has suffered the most because of the crisis, as the odds would have been on services to suffer the most, especially with the severe decline in the exchange rate¹. This result implies two important things: first, the absolute/relative rise in agriculture and the absolute decline in services mean that Lebanon has undergone only a partial structural shift in its economy; second, the relative rise in services means that services are much stronger and rooted than we think, as it seems to be determined by almost immutable forces of history and geography — which perhaps bodes well to the future of financial services, other things being equal!

¹ Exchange rate depreciation is equivalent to an increase in the relative price of tradables to non-tradables (or services), so it should induce an increase in the production of the former and a decline in the latter.

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