Beirut, Lebanon (Enmaeya News) — After years of economic paralysis, Lebanon has shown early signs of revival in 2025. But according to a new report from Bank Audi, the recent momentum will only translate into sustainable development if the country undertakes urgent political, financial, and institutional reforms.
The report, titled “Three Conditions to Rebuild Confidence and Restore Pre-Crisis Growth,” points to a shift in the country’s economic direction in the first half of the year. This shift, the bank argues, is largely due to breakthroughs in local governance—chief among them, the election of a new president, the formation of cabinet, and long-stalled appointments in public administration.
A Flicker of Growth: What the Numbers Say
Lebanon’s imports rose 16% between January and May, indicating renewed demand for both essential and investment goods. Adjusted for inflation, real import growth stood at 9.3%.
Meanwhile, the Central Bank increased its foreign currency reserves by $1.2 billion since January, despite losses from the recent war. By the end of June, reserves reached $11.3 billion—the highest level in three years and a key marker of regained currency stability.
In a surprising development, Lebanon’s Eurobonds—considered nearly worthless by markets last fall—jumped in value from 6 cents to 18 cents on the dollar. Bank Audi credited this to investor expectations of real progress in long-delayed debt restructuring and reform implementation.
The banking sector, though still under severe pressure, also saw a modest inflow of confidence. Fresh dollar deposits rose from $3.2 billion at the start of the year to $4 billion in June. Yet, the report warns, Lebanon’s financial institutions remain exposed to risk without legislation that addresses both sector restructuring and the fiscal gap.
Development and Structural Action
Bank Audi outlines three development-critical actions that must take place in the coming year:
Stabilize and Reclaim State Sovereignty
The foundation for any rebuilding effort begins with peace and sovereignty. A stable ceasefire, a reasserted role for the Lebanese Army, and clear control of arms by the state are seen as essential conditions to secure international development funding.Fix the Banking Sector to Enable Recovery
With liquidity declining and financial confidence eroding, Lebanon’s banking system faces an existential test. The report urges lawmakers to pass restructuring laws and address the financial gap before the May 2026 parliamentary elections, after which the government will shift into a caretaker role and lose decision-making power. Delay beyond that point, the report warns, could derail institutional recovery.Secure an IMF Agreement to Unlock Global Support
Lebanon’s return to development hinges on international backing—and that, the report stresses, can’t happen without a deal with the International Monetary Fund. “Past donor pledges didn’t materialize because there was no trusted global partner overseeing reforms. The IMF is that partner,” the report said.
Still, the developments of early 2025 suggest that a new political chapter may be opening. Whether Lebanon can turn this moment into a development breakthrough remains to be seen.
