Lebanon’s outlook is bleak absent an IMF program. If Lebanon does not complete IMF-mandated reforms, most forecasts estimate additional years of GDP contraction; further unemployment and poverty; greater currency devaluation and inflation; and a continuation of bank-imposed capital controls. The state’s revenues are close to zero, and the government has fallen behind on payments to private companies. Lebanon is unable to pay for the importation of basic commodities like fuel, wheat, and medicine and has had to dip into the Central Bank’s foreign currency reserves to meet its external financing needs. Since October 2019, the Central Bank has spent an estimated $20 billion both on imports and interventions in the foreign exchange market.
In the long-term, however, there may be opportunities for international companies in the energy, water, waste, safety and security, fast-food franchising, healthcare, and information and communications technology (ICT) sectors. Within the energy sector, there may be opportunities for power generation and renewable energy projects. Although Lebanon is looking to issue additional licenses for offshore hydrocarbon exploration, its second licensing round has been postponed four times since 2020. Large infrastructure projects may be possible once again if Lebanon acceds to an IMF program, restructures its debt, and returns to international capital markets.