Lebanon's economy and markets are best described at the dawn of the new millennium by a private and liberal economic activity and an openness to abroad with perfect capital and labor mobility. The private sector contributes to around 75% of aggregate demand, a well-diversified sector that covers the totality of economic sectors and is a major pillar for growth and recovery. The Lebanese economy is also a typical open economy with a large banking sector equivalent to more than 2.5 times its economic sector and providing an important support to aggregate demand.
Lebanon recorded a Human Poverty Index of 7% in the 2009 HDI report which ranks it in the 33rd place.
The 1975-90 civil war seriously damaged Lebanon's economic infrastructure, cut national output by half, and all but ended Lebanon's position as a Middle Eastern entrepot and banking hub. Peace has strongly enabled the central government to restore control in Beirut, begin collecting taxes, and regain access to key port and government facilities. As a result, current GDP per capita expanded 353% in the 1990s . However, since the 2006 Lebanon war, the country has set back economically.
Economic recovery has been helped by a financially sound banking system and resilient small- and medium-scale manufacturers, with family remittances, banking services, manufactured and farm exports, and international aid as the main sources of foreign exchange. Lebanon's economy has made impressive gains since the launch of "Horizon 2000," the government's $20 billion reconstruction program in 1993. Real GDP grew 8% in 1994 and 7% in 1995 before Israel's Operation Grapes of Wrath in April 1996 stunted economic activity. Real GDP grew at an average annual rate of less than 3% per year for 1997 and 1998 and only 1% in 1999. During 1992-98, annual inflation fell from more than 100% to 5%, and foreign exchange reserves jumped to more than $6 billion from $1.4 billion. Burgeoning capital inflows have generated foreign payments surpluses, and the Lebanese pound has remained relatively stable. Progress also has been made in rebuilding Lebanon's war-torn physical and financial infrastructure. Solidere, a $2-billion firm, is managing the reconstruction of Beirut's central business district; the stock market reopened in January 1996, and international banks and insurance companies are returning. The government nonetheless faces serious challenges in the economic arena. It has had to fund reconstruction by tapping foreign exchange reserves and boosting borrowing. Reducing the government budget deficit is a major goal of the current government. The gap between rich and poor has widened in the 1990s, resulting in grassroots dissatisfaction over the skewed distribution of the reconstruction's benefits and leading the government to shift its focus from rebuilding infrastructure to improving living conditions.
This is a chart of trend of gross domestic product of Lebanon at market prices estimated by the International Monetary Fund with figures in millions of Lebanese Pounds.
|Year||Gross Domestic Product||US Dollar Exchange||Inflation Index (2000=100)|
|1980||14,000||3.43 Lebanese Pounds||0.071|
|1985||59,329||16.41 Lebanese Pounds||0.21|
|1990||1,973,000||695.20 Lebanese Pounds||18|
|1995||18,027,607||1,621.33 Lebanese Pounds||81|
|2000||25,143,000||1,507.46 Lebanese Pounds||100|
|2005||33,243,000||1,507.48 Lebanese Pounds||106|
For purchasing power parity comparisons, the US Dollar is exchanged at 1,403.25 Lebanese Pounds only. Average wages in 2007 hover around $31-40 per day.
A report by Strategic Foresight Group has calculated the opportunity cost of conflict for the Middle East from 1991-2010 at a whopping $12 trillion (12,000,000,000,000). Had there been peace in the region, Lebanon’s share during this period would be almost a $100 billion (according to 2006 prices). In other words had there been peace and cooperation since 1991, every Lebanese citizen would be earning over $11,000 instead of the $5,600 in 2010.
Lebanon benefits from its large, cohesive, and entrepreneurial diaspora. Over the course of time, emigration has yielded Lebanese "commercial networks" throughout the world. As a result, remittances from Lebanese abroad to family members within the country total $5.6 billion and account for one fifth of the country's economy. Nassib Ghobril, the head of research and analysis for Byblos Bank, calculates that Lebanese abroad supply Lebanon with about $1,400 per capita every year.
The stock market capitalisation of listed companies in Lebanon was valued at $10,858 million in 2007 by the World Bank. 
Lebanon was unable to attract significant foreign aid to help it rebuild from both the long civil war (1975-89) and the Israeli occupation of the south (1978-2000). In addition, the delicate social balance and the near- dissolution of central government institutions during the civil war handicapped the state as it sought to capture revenues to fund the recovery effort. Thus it accumulated significant debt, which by 2001 had reached $28 billion, or nearly 150% of GDP. Unfortunately, economic performance was sluggish in 2000 and 2001 (zero growth in 2000, and estimates between 1.0-1.4% in 2001, largely attributed to slight increases in tourism, banking, industry, and construction). Unemployment is estimated at 14% for 2000 and 29% among the 15-24 year age group, with preliminary estimates of further increases in 2001. However, fortunately, many Lebanese expatriates have been able to return to the country due to the negative financial situations they are facing abroad, due to the global economic crisis. Also, more job opportunities are attracting more Lebanese youths for a chance to return and work in Lebanon, and also a benefit for the Lebanese living in the country, graduating from universities.
Lebanon's current program of reforms focuses on three main pillars:
The government also has maintained a firm commitment to the Lebanese pound, which has been pegged to the dollar since September 1999. In late 2000, the government substantially reduced customs duties, adopted export promotion schemes for agriculture, decreased social security fees and restrictions on investment in real estate by foreigners, and adopted an open-skies policy,with positive effects on trade in 1991. Nonetheless, the relative appreciation of the Lebanese currency has undermined competitiveness, with merchandise exports falling from 23% of GDP in 1989 to 4% in 2000.
In 2001, the government turned its focus to fiscal measures, increasing gasoline taxes, reducing expenditures, and approving a value-added-tax that became effective in February 2002. Slow money growth and dollarization of deposits have hampered the ability of commercial banks to finance the government, leaving more of the burden to the central bank. This monetization of the fiscal deficit has put enormous pressure on central bank reserves, mitigated only slightly with the issuance of new Eurobonds over the past 2 years. The central bank has maintained a stable currency by intervening directly in the market, as well as low inflation, and succeeded in maintaining investors' confidence in debt. It has done so at a cost, however, as international reserves declined by $2.4 billion in 2000 and by $1.6 billion in the first half of 2001.
For 2002, the government has put primary emphasis on privatization, initially in the telecom sector and electricity, with continued planning for sales of the state airline, Beirut port, and water utilities. The government has pledged to apply the proceeds of sales to reducing the public debt and the budget deficit. In addition, it projects that privatization will bring new savings as government payrolls are pared, interest rates decline, and private sector growth and foreign investment are stimulated. The government also is tackling the daunting task of administrative reform, aiming to bring in qualified technocrats to address ambitious economic programs, and reviewing further savings that can be realized through reforms of the income tax system. The Lebanese Government faces major challenges in order to meet the requirements of a fiscal adjustment program focusing on tax reforms and modernization, expenditure rationalization, privatization, and improved debt management.
The U.S. enjoys a strong exporter position with Lebanon, generally ranking as Lebanon's fourth-largest source of imported goods. More than 160 offices representing U.S. businesses currently operate in Lebanon. Since the lifting of the passport restriction in 1997 (see below), a number of large U.S. companies have opened branches or regional offices, including Microsoft, American Airlines, Arthur Andersen, Coca-Cola, FedEx, UPS, General Electric, Parsons Brinckerhoff, Cisco Systems, Eli Lilly, Computer Associates and Pepsi Cola. Mexico has also many enterprises run by ethnic Lebanese, such as Carlos Slim's Telmex.
Solidere shares are the most actively traded in the Beirut Stock Exchange. Its share price in the Beirut Stock Exchange has risen sharply in the last year from around US$5.00 in early 2004 to close at US$ 17.50 on Friday, 23 December 2005.
Lebanon is one of the only seven countries in the world to have scored profits in 2008. Given the regular security turmoil it has faced in the past, its banks have adopted a conservative approach. The strict regulations imposed by the central bank were crafted to make the Lebanese economy immune to political crisis; and so far, this has applied to the global economic crisis as well. The Lebanese banks remain, under the current circumstances, high on liquidity and reputed for their security. 
Moody's has recently shifted Lebanon's sovereign rankings from stable to positive acknowledging its financial security. Moreover, with a Beirut stock market increase of 51%, the index provider MSCI, ranked Lebanon as the world's best performer in 2008. Analysts are, nonetheless, skeptical about the future indirect effects of the crisis, but so far, the direct consequences have proved to be positive.
As of June 2009 it was reported that new Lebanese government will have to face economic reality, pro-Western camp which won Beirut vote inherits stable financial situation from current government but still has to deal with huge national debt 
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