The street in front of the Phoenicia Hotel in Beirut, March 3, 2025. (Credit: Illustrative photo by Philippe Hage Boutros/L'Orient-Le Jour)
BEIRUT — Lebanon’s private sector is no longer looking to the future with the optimism it showed after the election of President Joseph Aoun and the formation of Prime Minister Nawaf Salam’s government earlier this year. Still, confidence has not collapsed entirely, as reflected in the latest Purchasing Managers’ Index (PMI) published this week by Blominvest, covering the month of May.
The PMI stood at 48.9 in May, a slight decline from 49.0 in April, but still above the five-month low recorded in March. The fragile momentu
m built during last-minute meetings between Lebanese officials and the International Monetary Fund (IMF) in Washington appears to continue playing a role in shaping the private sector’s expectations. These meetings are part of broader negotiations aimed at securing a financial assistance program to help Lebanon emerge from the economic crisis that began in 2019, attract investors and support reconstruction efforts.
Meanwhile, the fragile cease-fire between Hezbollah and Israel, in place since Nov. 27, has largely held despite repeated violations — mostly by Israel — as the summer season approaches. Industry professionals are hopeful that Gulf tourists will return to spend their holidays in Lebanon. In May, the United Arab Emirates lifted its travel ban to Lebanon. Saudi Arabia has also announced its intention to do so, but has yet to follow through.
Still, with the PMI remaining below the 50-point threshold, private sector players continue to anticipate a slowdown in activity — a trend now entering its third consecutive month.
An economist at Blominvest, Mira Said, commented, "Political uncertainty remains high, both nationally and regionally. The United States is pressing for faster progress on disarming Hezbollah, despite Lebanon's initiative to disarm Palestinian refugee camps, considered a potential step toward resolving the crucial issue of Hezbollah's arsenal."
Aoun met with Ramez Dimachkiyeh, head of the Lebanese-Palestinian Dialogue Committee, at the Baabda Palace. Dimachkiyeh briefed the president on ongoing discussions with Palestinian representatives regarding the implementation of the Lebanese government’s decision to disarm Palestinian refugee camps, scheduled to begin in June. The issue is central to an agreement between Aoun and Palestinian President Mahmoud Abbas.
Among the factors fueling pessimism in the private sector, economist Said pointed to the ongoing war in Gaza, which she said, "Shows no signs of easing soon."
"As a result, the economy seems stuck at an impasse, with the dynamic seen at the beginning of the year gradually fading. On a positive note, the business climate improved in May, driven by hopes of political stability, the resumption of tourism from Gulf countries, and the return of Arab investments," she added.
Finally, she attributed the broader decline in activity to weak demand and rising shipping costs, both of which have placed additional pressure on production and new orders.
The fragile momentum built during last-minute meetings between Lebanese officials and the International Monetary Fund (IMF) in Washington appears to continue playing a role in shaping the private sector’s expectations. These meetings are part of broader negotiations aimed at securing a financial assistance program to help...