meed-logo

line1 line2 line3
SIGN IN / REGISTER

No end in sight for Lebanon’s economic woes

12 June 2023

This package on Lebanon also includes:

> Political deadlock in Lebanon blocks reforms
> Lebanon moves to secure $150m solar financing
> Dar al-Handasah acquires Turkish consultant
> Eni and Total complete Lebanon gas deal

 

Experts remain pessimistic about the outlook for Lebanon’s economy as the crisis continues to worsen more than three years after it began in 2019.

The country only has a caretaker government and no president – and it is hard to see how it will implement the reforms the IMF says are needed.

On 8 June, IMF spokesperson Julie Kozack said: “Lebanon needs urgent action to implement a comprehensive economic reform programme to arrest the severe and deepening crisis and to allow Lebanon’s economy to recover.”

She added that the IMF was concerned that delays in implementing key reforms were keeping the economy severely depressed.

“We are concerned about irreversible consequences for the economy, especially for the poor citizens of Lebanon and the middle class,” she said.

Lebanon’s currency has weakened dramatically since the start of the country’s economic crisis, plunging much of the population into poverty.

In March, the Lebanese pound, officially pegged at 15,000 to the dollar, was trading at 100,000 against the dollar on the country’s parallel market, down from 1,507 before the economic crisis hit in 2019.

In May, a World Bank report stated: “The systemic failure of Lebanon’s banking system and the collapse of the currency have resulted in a large, dollarised cash-based economy.

“It not only threatens to compromise the effectiveness of fiscal and monetary policy, but also heightens the risk of money laundering, increases informality and prompts further tax evasion.”

In April 2020, the Lebanese government agreed with IMF staff to implement a series of reforms to end the crisis, but very few have been executed.

This is mainly due to the country’s ongoing political deadlock.

Lebanon has had no head of state since President Michel Aoun’s term ended at the end of October 2022, worsening the country’s political paralysis at a time when important policy decisions are needed to get the economy back on track.

According to the IMF, the economic outlook for Lebanon is highly uncertain and depends on policy actions taken by the authorities to carry out the agreed reforms.

Kozack said: “Timely implementation of these reforms is critical to end the current crisis and prevent a further deterioration in living standards of the people of Lebanon.”

She added: “Lebanon will need strong financial support from the broader international community and the financial needs of Lebanon over the next several years are very large given the magnitude of the economic crisis.”

Bailout prospects

While the IMF has said that Lebanon will need significant financial support from other countries to help it get through its economic crisis, it is unclear where that support will come from.

Nicholas Blanford, a non-resident senior fellow with the Atlantic Council’s Middle East programmes, says it is unlikely that Saudi Arabia will be willing to bail the country out financially as it has done in the past.

He said: “Saudi Arabia has pumped billions of dollars into Lebanon over the years, including helping with the reconstruction programme in the 1990s after the civil war. Saudi has also helped Lebanon financially through various economic slumps.”

The change of leadership in Saudi Arabia when King Salman came to the throne in 2015 led to a change in policy regarding financial bailouts for Lebanon, according to Blanford.

“It seems like Saudi feels that it got very little in return for its past investment in Lebanon due to the fact that Hezbollah remains a dominant force in the country politically and militarily.

“The Americans and the French have, for several years, been pressing the Saudis to show more interest in Lebanon as a pushback against Iranian influence, but, so far, they haven’t shown much interest.”

The Lebanese are keeping their fingers crossed that economically viable quantities of oil and gas are found, but there is also a huge amount of scepticism given the state of the political system here and the nature of the politicians
Nicholas Blanford, Atlantic Council’s Middle East programmes

In October last year, Lebanon and Israel agreed a deal to end a long-running maritime border dispute in the Mediterranean Sea, clearing the way for increased oil and gas exploration activity in Lebanese waters.

Following the deal, in May this year, it was announced that a consortium led by France’s TotalEnergies would start drilling for oil and gas off the country's coast at the beginning of September.

While it is possible that new hydrocarbon discoveries in Lebanese waters could help ease the country’s economic problems over the long term, it is doubtful that this would provide any benefit in the short term, according to Blanford.

“The Lebanese are keeping their fingers crossed that economically viable quantities of oil and gas are found, but there is also a huge amount of scepticism given the state of the political system here and the nature of the politicians themselves.”

Blanford believes that many Lebanese citizens are worried that if commercially viable quantities of hydrocarbons are found, they are ultimately only likely to benefit the country’s oligarchs rather than the general public.

Due to the wide range of severe political and economic problems that Lebanon faces, there is unlikely to be any improvement over the coming months unless common ground is found between the country’s rival political blocs.

https://image.digitalinsightresearch.in/uploads/NewsArticle/10932005/main.gif
Wil Crisp

Register for MEED's guest program now to access this article.

Click here to register
Exclusive from Meed
Related Articles
  • Diriyah awards $727m Waldorf Astoria superblock deal

    17 June 2026

     

    Saudi gigaproject developer Diriyah Company has awarded a SR2.7bn ($727m) contract for the main construction works on the development’s Waldorf Astoria superblock.

    The contract was awarded to the joint venture of Hassan Allam Construction Saudi and UCC Saudi, the local branch of Qatar’s Urbacon Holding.

    The Waldorf Astoria superblock is a mixed-use development comprising a Waldorf Astoria hotel, Waldorf Astoria-branded residences, commercial and residential facilities, and office space.

    The Waldorf Astoria hotel will feature 200 keys, while the residential component will comprise 47 branded residences.

    The project is located on the Grand Boulevard South and Northern Arterial Road in the Boulevard Northwestern district at Diriyah Gate 2. 

    Diriyah Company tendered the contract in November last year, with submissions due in January, as MEED reported.

    Diriyah Company Group CEO Jerry Inzerillo said: “We are delighted to announce this latest major construction contract for the Waldorf Astoria superblock as we continue to progress at pace across the Diriyah development area. The Waldorf Astoria will be a world-class addition to our growing portfolio of globally renowned hospitality brands, further strengthening Diriyah’s appeal as a globally significant destination that offers world-class hospitality and lifestyle experiences.

    “Together with our partners, we look forward to delivering another landmark development that supports the kingdom’s Vision 2030 ambitions and contributes to the continued growth and success of Diriyah.”

    Hassan Allam, chairman and CEO of Hassan Allam Holding, said: “We are proud to support the development of one of the kingdom’s most ambitious and transformative destinations and to continue our partnership with Diriyah Company in bringing its vision to life.

    “Drawing on more than 90 years of experience across the Mena region, we remain committed to delivering the highest standards of quality and excellence on landmark projects that are helping shape the kingdom’s future.”

    Ramez Al-Khayyat, UCC Holding president and group CEO, said: “Being awarded this contract by Diriyah Company marks another important milestone in our growing partnership and reinforces our shared commitment to delivering world-class developments across the kingdom. This project builds on our ongoing collaboration in Diriyah, including the delivery of four luxury hotels and the Royal Diriyah Equestrian and Polo Club in Wadi Safar.

    “We value the opportunity to contribute once again to one of Saudi Arabia’s most ambitious and prestigious urban development destinations, supporting the vision of creating a world-class cultural, hospitality and lifestyle hub.”

    The latest award follows Diriyah Company’s award of an estimated SR730m ($195m) construction contract for civic quarter buildings within the Diriyah development to local contractor Al-Rashid Trading & Contracting Company (RTCC).

    In April, Diriyah announced a SR1.84bn ($490m) construction contract to build the Saudi Arabia Museum of Contemporary Art (SAMoCA) within the Diriyah development. The contract was awarded to a consortium of Egyptian contractor Hassan Allam Construction Saudi and Saudi Arabia’s Albawani.

    In March, Diriyah Company awarded an estimated SR2.5bn ($666m) contract to build the Pendry superblock in the DG2 area.

    The Pendry superblock includes the construction of the Pendry Hotel alongside residential and commercial assets. The package will cover 75,365 square metres and is located in the northwestern district of the DG2 area.

    The previous month, Diriyah Company also awarded a SR717m ($192m) contract for the construction of the One Hotel, located in the Diriyah Two area of the masterplan, with a gross floor area of more than 31,000 sq m.

    The Diriyah masterplan envisages the city as a cultural and lifestyle tourism destination. Located northwest of Riyadh’s city centre, it will cover 14 square kilometres and combine 300 years of history, culture and heritage with hospitality facilities.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/17287718/main.jpg
    Yasir Iqbal
  • AHS Properties acquires Shangri-La hotel for $300m

    17 June 2026

    Dubai-based real estate developer AHS Properties has announced the acquisition of the Shangri-La hotel for AED1.1bn ($300m), marking one of the largest single-asset real estate transactions in recent years.

    AHS Properties acquired the hotel from local firm Mismak Asset Management.

    The Shangri-La Hotel is a 43-storey, 200-metre tower located on Sheikh Zayed Road. Completed in 2003, it was among the first five-star hotels to open along the corridor.

    The acquisition expands AHS Properties’ portfolio, which includes AHS Tower, a Grade A commercial development on Sheikh Zayed Road, and AHS City, the company’s master-planned mixed-use community on the same corridor.

    In a statement, AHS Properties said that AHS Tower, AHS City and the Shangri-La hotel form a strategic “vertical corridor” platform, representing a significant portion of the company’s AED50bn development pipeline through the end of 2026.

    “The transaction reflects AHS Properties’ strategy of deploying capital into high-quality, supply-constrained assets,” the statement added.

    According to the Dubai Land Department, Dubai’s real estate sector recorded AED252bn in transactions in Q1 2026.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/17310101/main.jpg
    Yasir Iqbal
  • UAE moves to clear the path for recovery

    17 June 2026

    Commentary
    Colin Foreman
    Editor

    More than three months after the conflict began to disrupt business across the Gulf, the UAE is moving to resolve the technical challenges that the economy faces as it shifts towards recovery.

    The insurance gap has been a key obstacle to the recovery of aviation and tourism. Several countries continue to maintain advisories against travel to the Gulf, making it difficult or impossible for visitors to obtain conventional cover for trips to or through the region. The concern is twofold: one, becoming stranded should hostilities resume, and two, not being able to secure medical insurance. Both Emirates and Etihad have now moved to address that directly, offering insurance to passengers flying to or through their respective home hubs. The Etihad scheme, backed by DCT Abu Dhabi and underwritten by Daman, will run from July to December and covers eligible visitors for up to 15 days.

    The second area of concern is real estate. Anecdotally, buyers in sectors economically exposed to the conflict have found it increasingly difficult to obtain mortgage financing, a problem that has become especially acute at the point of handover. The recently signed partnership between Dubai Holding Real Estate and Commercial Bank of Dubai is designed to ease that pressure. The programme opens financing from the 30% construction stage once buyers have met a 50% payment threshold, giving purchasers earlier visibility of their borrowing capacity and reducing uncertainty during the off-plan purchase process.

    Taken together, the two initiatives show that the UAE is proactively addressing the technical hurdles as and when they arise. As the recovery gathers momentum, more challenges will surface. The capacity and willingness to address them as they emerge will be crucial to a meaningful recovery.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/17306586/main.jpg
    Colin Foreman
  • Libya signs three oil deals after licensing round

    17 June 2026

    Libya’s National Oil Corporation (NOC) has signed three production-sharing agreements with several international energy companies following the country’s first licensing round in nearly two decades.

    The three agreements have been signed with the following consortiums:

    • Block O1 – offshore – Eni (Italy; 60%) and QatarEnergy (40%)
    • Block O7 – offshore – Repsol (Spain; 40%), Turkiye Petrolleri A O (TPAO; Turkiye; 40%) and MOL Group (Hungary; 20%)
    • Block C3 – onshore – Repsol and TPAO

    The contracts are three of the five announced as awarded in February this year as part of the 2025 licensing round.

    The three contracts were signed on 15 June.

    It is not known why the remaining two awarded contracts have not been signed.

    The remaining two contracts are:

    • Block M1 – onshore – Aiteo (Nigeria)
    • Block S4 – onshore – Chevron (US)

    Libya is seeking to attract investment and raise oil production capacity to 2 million barrels a day (b/d) from around 1.4 million b/d currently.

    The chairman of NOC, Massoud Suleman, said that the agreements reflected growing confidence in Libya’s oil and gas sector and would support exploration, development and production growth.

    The 2025 licensing round was Libya’s first licensing round since 2007.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/17297353/main.jpg
    Wil Crisp
  • US–Iran deal sets Hormuz road map

    17 June 2026

    Register for MEED’s 14-day trial access 

    The US-Iran agreement, declared complete on 14 June, reopens the Strait of Hormuz, lifts the US naval blockade and ends a war that has closed the Gulf’s export artery since 28 February. The strait reopens at Friday’s signing on paper, but the recovery will take months.

    US President Donald Trump announced the deal on Truth Social, authorising the "toll-free opening" of the strait and the immediate removal of the blockade, with formal signing set for Geneva on 19 June – with vice-president JD Vance to sign for Washington and parliamentary speaker Mohammad Baqer Ghalibaf for Tehran in the highest-level US-Iran meeting since 1979.

    Iran’s deputy foreign minister Kazem Gharibabadi confirmed the text was finalised but said Tehran would not implement it until signing, with the strait staying closed in the interim.

    Signing versus substance

    The signing on 19 June is merely the starting line that will set in motion a partial reopening to traffic alongside a clearance operation to remove the mines laid by Tehran across key sections of the strait.

    The memorandum gives Iranian forces 30 days from signing to clear the strait of mines. At the same time, the Pentagon’s estimates appear to suggest that a full minesweeping could take up to six months, even with three dedicated vessels in the region.

    Such gaps – here a 30-day treaty obligation against a six-month operational reality – have become the running feature of the bilateral negotiations, which have been framed by mutual distrust and plagued by an absence of granular detail.

    The deal is welcome for the region despite its uncertainty. Behind the mines sits a tanker backlog built over more than 100 days, and Gulf producers that throttled back production and need time and assurances to restore flow.

    Before the war, roughly 100 ships transited daily; Kpler now projects around 40 a day could sail within the first month, but with an estimated 300 loaded vessels stranded on either side of the strait, and 250 more sitting empty and idle in the Gulf, it is a pressure release valve, not an immediate restoration of flow.

    A total restoration of oil and trade flows is unlikely to come into view before the year’s end.

    Insurance represents the second brake, with war-risk premiums standing at 1-4% of vessel value per transit, or about $8m for a $200m tanker – against less than 0.1% before the war.

    Shipping associations are no less cautious, with the Baltic and International Maritime Council calling for verified mine-free routes before volume traffic resumes.

    Insurance underwriters are likewise unlikely to relent on prices until clearance is confirmed.

    Conditional relief

    Markets have already traded the sentiment, however. Brent settled at $87.33 on 13 June – an eight-week low – and have fallen further as the deal has firmed. As of early morning trading on 16 June, the first full day of trading after the Islamic New Year, Brent was down at $78.

    Yet the relief remains highly conditional: a 60-day nuclear negotiation now follows the signing, and a breakdown in either this, passage through the strait or peace in Lebanon could return the strait to crisis.

    The US-touted toll-free terminology is also narrower than billed, with the Iranians instead affirming a 60-day grace period for fees but not eliminating the possibility of “fees” for navigation, environmental and insurance services after that point.

    The distinction is legal, not rhetorical, with international maritime law barring tolls on passage through natural straits but permitting the imposition of service fees on vessels passing through territorial waters.

    It is through this terminology that Iran is now consistently framing its plans to charge fees from passing vessels through the office of its Persian Gulf Strait Authority – established 5 May and since sanctioned by the US Treasury.

    For the Gulf, a 60-day waiver that resolves into an Iranian (and possibly joint Omani) fee regime is a pause in Iran’s tollgate economy, not its end – and would represent a strategic concession for the US, the Gulf and the globe.

    Levant entanglement

    Lebanon is another conditional space that the deal cannot fully escape, with a flare-up on that front being the final potential trigger that could collapse the 60-day agreement.

    Iran has explicitly tied a ceasefire in Lebanon to the resolution of transit in the strait, but Israel does not agree with this, and the linkage may have inadvertently handed Tel Aviv the exact tool it needs to disrupt the US–Iran ceasefire – through the simple of continuing a conflict that it already wants to continue.

    Within a day of the deal, Israeli Defence Minister Israel Katz said the IDF would stay in southern Lebanon “without any time limit”, with US officials corroborating that Israeli withdrawal was never a condition of a deal.

    On the ground, the ceasefire is already looking frail, with post-deal fire straying in both directions and already endangering the regional calm and Hormuz reopening the Gulf is already pricing.

    For Gulf producers and shippers, the distinction and in some cases friction between what the deal declares and what it actually delivers remains a cause for uncertainty.

    A declaration is easy, but the delivery requires nuclear negotiation, mine-clearance verification, insurance repricing and a 60-day political test before barrels can again move at volume.

    Trump, who has been frustrated for months with the slow progress on Iran from a US perspective, is also more than likely to be distracted by other concerns on a timeline shorter than 60 days – risking the political will to peace coming up short.

    In the Gulf, whether Saudi Arabia and the UAE send cabinet-level representatives to Geneva on Friday will signal whether the region’s political leaders are willing to wield the political capital necessary to keep the US on track and pursue the ceasefire to fruition.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/17293856/main.gif
    John Bambridge