BLOM Lebanon PMI rose from 47.6 in March 2025 to 49 in April 2025, indicating that the Lebanese private sector business activity contracted at a softer pace. The contraction in April was attributed to the decrease in output as new orders and new export orders dropped marginally that month. Lebanon and the region witnessed several events that led to the softening of private sector activity in April. First, the internal debate regarding surrendering Hezbollah’s weapon from the north of the Litani River escalated between opposite political parties. A couple of Hezbollah’s leaders stated that no one can force them to submit their weapon. They are linking state’s exclusive control of weapon with the withdrawal of Israeli forces from the Lebanese territories, freeing of Lebanese hostages, and reconstruction. On the other hand, both Lebanese President and Prime Minister have confirmed that the surrendering of weapons will be implemented soon. Second, the Israeli breaches of the cease-fire agreement are persisting as assassinations of Hezbollah’s military members have continued, in addition to airstrikes in South Lebanon and the Southern Suburbs of Beirut. Additionally, the military tension in the region is intensifying as Israeli’s attacks on Gaza are increasing and the US airstrikes on Yemen’s Houthi are multiplying. This political and security instability, in addition to the limited purchasing power of Lebanese households, led to the contraction in Lebanese private sector business activity in April, however at a reduced rate.
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