October 25, 2026
The Lebanese economy recorded a slight improvement during the third quarter of 2026, supported by limited positive indicators in the movement of expatriates and foreign trade, after a very weak performance in the second quarter, according to a recent economic report issued by “Bank Audi.” Despite this relative recovery, financial and monetary challenges still loom over the general scene.
The report indicated that the number of arrivals through Beirut Airport declined by 5.8% on an annual basis, recording an improvement compared to a sharp decline of 44.4% in the second quarter. This coincided with positive developments represented by the UAE lifting the travel ban on Lebanon, and the Kingdom of Saudi Arabia lifting the ban imposed on Lebanese exports, in parallel with the resumption of land exports to the Kingdom on August 20.
At the service and financial sector level, the actual balance of payments achieved a surplus of $844 million during the first eight months of the year, compared to a surplus of $3.3 billion in the entire year of 2025, while new deposits in fresh dollars amounted to about $5.65 billion as of August.
With regard to public finance, the report indicated that the draft 2027 budget approved by the Council of Ministers aims to achieve a zero total deficit and a primary surplus of $173 million, with revenues and expenditures growing by 14% to reach $6.9 billion. Budget items show that value-added tax constitutes 52% of revenues, while salaries and wages account for 68% of public spending. In the same context, the Ministry of Finance expects real GDP to contract by 7.5% during 2026, before returning to record growth of 4.5% in 2027.
On the monetary level, the Bank of Lebanon’s liquid foreign reserves amounted to $11.4 billion at the end of September, recording a slight decline of $498 million compared to the end of December 2025, at a time when the Central Bank continued the policy of controlling the volume of cash in circulation to limit speculation.
As for the bond market, the prices of Lebanese Eurobonds witnessed fluctuations. It rose from 24 cents to the dollar in June to 30 cents in September, before falling to levels ranging between 26 and 28.63 cents. In this context, Goldman Sachs considered that pricing these bonds near the level of 29 cents reflects excessive optimism.
Regarding the structural reforms file, the report warned of the continued difficulty of reaching an agreement at the expert level with the International Monetary Fund, as a result of continuing disagreements regarding the law for resolving troubled banks and the urgent necessity of approving the financial gap law.
The report concluded by referring to the idea of establishing a Currency Board system, considering that it may represent the culmination of the economic recovery path in Lebanon, provided that it is not seen as an alternative to the radical financial and monetary reforms required.
