We've cut our 2025 GDP growth forecast for Lebanon by 2.2ppts to 0.8% to reflect the escalation in conflict between Israel and Hezbollah. Despite talks of ceasefire and Israel's moderate retaliation against Iran, which has calmed fears of a full-scale war in the Middle East, we expect the conflict will continue into next year and delay economic recovery. As we anticipated, the domestic political situation hasn't progressed. Consequently, Lebanon is in its third year without a president or a government.
Lebanon: War between Israel and Hezbollah extends economic decline