Today’s markets comment on behalf of Hassan Fawaz Chairman & Founder of GivTrade
27th January 2025
Lebanon could continue to face challenges with shifting global trade dynamics, geopolitical conditions, and economic pressures hindering the country’s recovery. The potential realignment of global trade, due to U.S.-China relations and tariff risks, could affect the Lebanese economy and other economies around the world. A stronger U.S. dollar could also weigh on the Lebanese pound and inflate import costs while weakening domestic demand and investment. As a result, Lebanon’s reliance on external aid and remittances could increase, reducing market confidence and growth prospects in key sectors.
However, Joseph Aoun’s election as president indicates an attempt to restore governance and improve confidence in the country’s stability. Reforms in the financial and judicial systems could help properly enforce accountability while a prudent monetary policy could help stabilize the economy. In this regard, initiating a blockchain public ledger for the government’s finances could help ensure transparency in public spending, which could help secure the government’s stature domestically and internationally. Additionally, the ceasefire with Israel could redefine regional security and promote stability. These changes may improve market sentiment in the short term although investors could remain cautious until clear reforms and fiscal stability are achieved.
The return of Donald Trump to the White House could further heighten uncertainty as investors react to new policy announcements. However, Trump could support peace initiatives in the Middle East, contributing to more stability in Lebanon. At the same time, U.S. and international aid could provide support for Lebanon’s economic recovery and its capacity to maintain stability, contributing to reconstruction efforts. In the meantime, caution could remain, with political and security risks weighing heavily on investor sentiment.