The latest index of the Beirut Traders Association-Fransabank (Q2 2025) shows the first signs of a recovery in local markets, a welcome development as the World Bank forecasts 4.7% GDP growth for Lebanon in 2025 and a sharp drop in inflation.
The retail trade index rose to 33.13 points in Q2 2025, up from 30.01 the previous quarter (base 100 = Q4 2019). Sales across all sectors improved by +11.5% compared to the first quarter, with the annual decline narrowing to just -0.86%. Even the long-volatile fuel sector recorded a 3.5% increase in volumes.
According to the report, this improvement stems from several factors: reform efforts launched by the government, the activation of economic diplomacy, particularly with Gulf countries, and the appointment of the new central bank (BDL) governor, Karim Souhaid, who has pledged to strengthen monetary independence, safeguard deposits, and step up anti-money laundering measures.
In parallel, Parliament amended the banking secrecy law, while the government approved a draft bill to restructure the banking sector. Lebanon also secured modest initial financing, including $250 million from the World Bank for the power sector.
The World Bank noted that annual inflation fell to 15% in Q2 2025, down from 20.7% a year earlier. More encouraging still, quarterly inflation dropped from +14.2% to just +2.8%. A breath of relief for purchasing power, even though the money supply, now close to 30 trillion Lebanese pounds, raises concerns about the future stability of the exchange rate.
Despite the more optimistic climate, the recovery hinges on several key issues: passing the “financial gap” law, adopting a credible repayment plan for depositors, restructuring debt and eurobonds, combating corruption and the informal economy, and addressing the Syrian refugee crisis, which is seen as critical for restoring public finances and stabilizing local employment.
In short, Lebanon’s economy is showing signs of life, but the rebound remains fragile. If reforms stall, the “spring” in retail trade could quickly give way to another season of paralysis.
Comments