The Institute of International Finance indicated that the Lebanese economy is stagnating, as the lack of reforms and the delays in the formation of a new Cabinet have dampened private consumption and investment. It added that delays in forming a new Cabinet are hindering the country's access to the $11.2bn in concessional loans and grants that the international community pledged at the CEDRE conference in April 2018. As such, it forecast real GDP growth to decelerate from 1.8% in 2017 to 1.3% in 2018, amid the ongoing political deadlock and absence of reforms. It anticipated that Lebanon's potential economic growth could increase from 2.7% in 2017 to 5% by 2023, in case authorities successfully implement the infrastructure projects under the Capital Investment Program that aims to upgrade the country's infrastructure. 

Further, the IIF indicated that inflationary pressure has increased due to the sharp increase in public-sector wages, the rise in global oil prices, last year's tax increases on consumption, income and profits, as well as the growth in global food prices. However, it expected this pressure to moderate, with the average inflation rate declining from 5.7% in 2018 to 3.8% in 2019. In addition, it considered that monetary policy in Lebanon should continue to be tight in order to reduce inflationary pressure, support the currency peg to the US dollar and ensure adequate inflows of non-resident deposits. Further, it expected confidence in the peg of the Lebanese pound to the US dollar to remain strong, supported by Banque du Liban's elevated assets in foreign currency of $43.6bn and gold reserves of about $11.1bn at end-August 2018.

In parallel, the IIF pointed out that Lebanon continues to face wide fiscal and current account deficits. It forecast the fiscal deficit to widen from 7% of GDP in 2017 to 9.7% of GDP in 2018, as the higher public-sector wage bill and significant increase in other current spending, due to the Parliamentary elections in May 2018, will more than offset additional revenues that may be raised from the tax increases that the government imposed last year. As such, it projected the public debt level to grow from 147.7% of GDP at the end of 2017 to 150.7% of GDP at end-2018 and 151.4% of GDP at end-2019. But it noted that the macroeconomic risks from the elevated debt level are partially offset by support from the highly liquid banking system, which continues to attract adequate deposits from the Lebanese Diaspora. 

The IIF considered that the government needs to proceed with serious fiscal adjustments and structural reforms in order to narrow the fiscal deficit, decrease the public debt level, and reduce the reliance on foreign inflows to cover the fiscal financing needs. It estimated that a primary surplus of more than 2.7% of GDP and a real GDP growth of at least 3% annually would help put the public debt level on a firm downward trajectory.

The United Nations ranked Lebanon in 80th place among 189 countries worldwide and in seventh place among 19 Arab countries on its Human Development Index (HDI) for 2017. Also, Lebanon ranked in 21st place among 53 upper middle-income countries (UMICs) included in the index. Lebanon's global rank improved by two spots from 82nd place in the 2016 index. However, Lebanon's global rank regressed by four spots from 76th place in the 2012 survey and by 14 spots from the 2010 index. The 14 notches decline in Lebanon's rank between 2010 and 2017 is the fifth steepest globally. 

The HDI uses three basic dimensions of human development, which are longevity, education and income, to assess countries. The United Nations considered that Lebanon has a "high-level" of human development, unchanged from the preceding survey. Further, Lebanon was one of 53 countries worldwide that have a "high-level" of human development. Norway has the highest level of human development globally, while Niger has the lowest level.

Lebanon received a score of 0.757 points on the HDI in 2017, up from 0.753 in 2016 and compared to 0.751 in 2012 and 0.758 in 2010. Lebanon's score was similar to the average score of countries that have a "high-level" of human development, while it came above the global average of 0.728 points and the Arab states' average of 0.699 points. On a global basis and among UMICs, Lebanon had a similar human development level to Azerbaijan and Macedonia, while it had a higher development level than Armenia, Thailand and Algeria, and a lower level of human development than Bosnia & Herzegovina, Venezuela and Brazil. Figures on individual components of the index show that Lebanon's results on the life expectancy and the mean years of schooling categories continue to be higher than the corresponding global averages, as well as higher than the averages of Arab countries and of countries with "high-level" of human development. 

Figures issued by the Ministry of Finance show that the compensation of public-sector personnel totaled $5.45bn in 2017, constituting an increase of 12% from $4.9bn in 2016. Salaries, wages and related benefits accounted for 66% of the total in 2017, followed by retirement benefits (24.4%), transfers to public institutions to cover salaries (5.4%), and end-of-service indemnities (4.1%). The rise in the compensation of public-sector personnel is due to a 14.1% increase in salaries, wages & related benefits, as well as to a growth of 11% in retirement benefits and of 4.6% in end-of-service indemnities. The compensation of public-sector personnel represented the largest component of current primary spending and accounted for 66.2% of such expenditures last year compared to 65.8% in 2016. It absorbed 35.4% of fiscal spending in 2017 relative to 32.7% in the previous year. The compensation of public-sector personnel was equivalent to 9.9% of GDP in 2017 compared to 9% of GDP in 2016.

In parallel, salaries, wages & related benefits paid to public-sector employees amounted to $3.6bn in 2017, constituting an increase of 14.1% from $3.2bn in 2016, due to the new public-sector salary scale that was enacted by the Lebanese Parliament in July 2017. This category includes basic salaries, employment benefits, allowances, contributions to civil servants' cooperatives, as well as contributions to other mutual funds providing health insurance for specific categories of civil servants, mainly civil and religious judges, and employees at the Parliament.