Economist

On April 27, 2025Lebanon is witnessing an unprecedented positive economic development in light of the continuous financial crises that have been ravaged by the country in recent years. Despite the deep challenges faced by the Lebanese economy, the latest statistics indicate that the country has witnessed a remarkable decline in The inflation rateThis may be considered an indication of the beginning of relative stability that may contribute to supporting economic recovery.

Inflation decreased: Is it the beginning of improvement?

According to data issued by Central Statistics Department in BeirutThe annual inflation rate in Lebanon decreased sharply to 14% In March 2025, compared to a percentage 70% In the same month of last year. This decline is among the few indicators that indicate relative stability in the crisis economic situation, and it is a green light for investors and economists who are awaiting the restoration of some confidence in the financial system.

The rate of inflation in Lebanon It is one of the most prominent economic indicators that citizens and investors follow up, as it reflects the economy’s ability to maintain the stability of prices and reduce the high prices that the population suffers from in light of political and financial crises.

Factors of decline in inflation: the stability of the exchange rate of the Lebanese lira

One of the most prominent factors that contributed to this noticeable decline in the inflation rate is The stability of the exchange rate of the Lebanese liraWhich remained fixed since mid -2023 at Limits of 89,500 Lebanese pounds against Dollar American. This relative stability in the exchange rate helped greatly in curbing the high prices, especially in light of the sharp fluctuations in the price of the lira during the previous years.

This critical stability is an important achievement in light of the rapid collapse witnessed by the Lebanese banking system, which had caused difficult economic repercussions on all sectors. Thanks to the stability of the exchange rate of the lira, prices have declined relatively in many goods and services, which helped reduce financial pressure on citizens.

Monthly inflation: limited stability despite some increases

Despite the significant decrease in Annual inflation rateThe recent data showed that the prices continued Height monthlyAnd if that is at a limited pace. In the month of March 2025, prices rose by a rate 0.44% On a monthly basis, a number that reflects the continuation of some inflationary pressures on some economic sectors.

The monthly increase in prices included a group of basic sectors that directly affect the life of the Lebanese citizen, such as:

• Clothing
• Housing and home services
• Food and drinks

These increases, despite being minimal, indicate that living pressures are still continuing, and that some sectors may not have benefited the same amount of the stability of the price of the Lebanese lira.

Cash policies and shrinking the monetary bloc

On the other hand, the economic source that spoke to “Lebanon 24” confirmed that Inflation rates decrease It is primarily due to a set of monetary and governmental policies that have been applied since the middle of last year. Among the most prominent of these policies:

1. Relative control of the exchange rate Through limited but effective interventions before Bank of Lebanon.
2. Reducing the monetary bloc in the Lebanese poundsThis contributed to reducing inflation resulting from the increase in the amount of money in circulation.

Does decline in inflation reflect a real economic improvement?

Although Inflation It is a positive indication, but many economic experts warn that this apparent improvement does not necessarily reflect a fundamental improvement in the Lebanese economic situation. According to the economic source, the stability it witnesses Lebanese lira As a result of the reduction of the monetary mass, it may not be sustainable in light of the shrinkage of local demand and poor commercial activity.

This decline in inflation indicates that Lebanese economy It may be at the stage Economic shrinkagewhere The request has decreased significantly Because of the deterioration of the purchasing power of citizens, which led to a widespread decline in commercial activity. These policies may be effective in reducing inflation in the short term, but they may also lead to a long -term economic growth if this situation continues.

Future challenges: How does Lebanon deal with the confidence crisis?

Besides economic challenges, Lebanon faces a major crisis in Confidence in the banking sectorIt is a matter that directly affects the ability to attract investments and return economic activity to normal levels. With the absence of a comprehensive solution to the banking crisis, the economic situation remains fragile and unstable, as it is still Financial challenges It accumulates continuously.

Many Lebanese citizens face Difficulties in reaching their savings In banks, which limits their ability to spend and contribute to economic growth. On the other hand, it continues Economic immigrationWhere many Lebanese seek to search for better opportunities abroad, which reflects the confidence crisis that the local market suffers from.

Future prospects: Challenges and opportunities for Lebanon

Although the Lebanese economic situation is still fragile, the Inflation and The stability of the exchange rate of the lira They provide some hopes of the possibility of gradual recovery. If this stability continues, you may witness Lebanese economy A kind of balance between demand and supply in the markets, which may lead to the return of some investments.

But this does not mean that Lebanon has exceeded the macroeconomic crisis, as the government needs to take serious steps in:

1. Achieving political stability.
2. Banking system reform.
3. Implementing structural economic reforms.

In addition to enhancing a culture of trust in financial institutions and encouraging internal and external investment by improving the legal and regulatory environment.

Is Lebanon on the right path?

that Noticeable decline in inflation In Lebanon it is a positive indication in the midst of the ongoing economic crisis. Although these results seem promising, economic challenges are still huge. Lebanon needs comprehensive reforms, and to pay attention to achieving long -term stability in all economic sectors. So, despite cautious optimism, work should be on Achieving long -term stability In the Lebanese economy is the first priority.