Private Sector Confidence Shaken by Lebanon’s Political Developments and Economic Pessimism

The BLOM Lebanon PMI for the month of July 2025 recorded 48.9, witnessing a decrease from 49.2 in June 2025. This slight decrease reveals the deterioration in private sector business activity for the fifth consecutive month, reflecting heightened political uncertainty and escalating regional tensions; it is interesting to note that the PMI recorded the same results as the month of May 2025. The downturn coincided with a series of high-stakes diplomatic developments and security threats that weighed heavily on investor confidence and economic momentum. Most significant among these was the visit of U.S. representative Thomas Barrack, whose push for a binding Lebanese Cabinet decision to disarm Hezbollah intensified domestic political divisions and placed the government under significant international pressure. While Lebanon formally responded to the U.S. – supported reform roadmap, Hezbollah’s public rejection of disarmament exacerbated internal paralysis and deepened institutional fragility. Simultaneously, a renewed wave of Israeli airstrikes across southern Lebanon and the Beqaa Valley, targeting Hezbollah infrastructure and operatives, fueled fears of a broader conflict and directly disrupted commercial and logistical operations, as well as the renewed wave of violence in Syria which hurt further the investment climate. Against this volatile backdrop, the private sector grew increasingly risk-averse, stalling business activity and amplifying Lebanon’s ongoing macroeconomic vulnerabilities.

 

For the full report, click on the link below:

Macro Report – July 2025

LB_PMI_ARA_2508LB_ PMI_ARA_2508_PR LB_PMI_ENG_2508LB_PMI_ENG_2508_PR

 

Leave a Reply

Your email address will not be published. Required fields are marked *