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Analisi 04.11.2019

A view on the Lebanese investment landscape

A view on the Lebanese investment landscape

Podcast - In terms of social dynamics, politics, and economics, the situation in Lebanon is worsening.


Three of our experts discuss Lebanon's economic outlook amid the social unrest. Listen to our latest podcast now:

For several years now, Lebanon’s economy has grown increasingly reliant on foreign deposits at local banks, as these are used to buy Eurobonds and help prop up the government’s finances. This year, as politics have remained complicated and thus stopped the necessary policy decisions from being made, deposit inflows have slowed. This has put stress on the system and resulted in the government having to resort to a number of alternative measures to generate revenues, including a bank tax and a tax on social media, with the latter sparking protests across the country. The tax was quickly abolished, but the protests continue. The protestors’ complaints are focused on corruption and a general sense of an elitist government not improving conditions for the wider population, with demands including calls for the government to resign.

Banks have been shut for nearly two weeks as the government tries to put together the necessary policy response. Unfortunately, the fractured nature of the government has rendered this seemingly impossible. The prime minister, Saad Hariri, resigned on 29 October and an interim government has yet to be announced. In response to this political vacuum, bond prices have been dropping precipitously. Earlier this year our emerging markets debt team reduced the Lebanon exposure, as it saw deposit flows slowing down and feared that there was the potential for this to cause bond price to decline. In this podcast we offer some insights into potential entry levels for investors, as well as into the broader outlook for the Lebanese economy.


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Peter Kinsella
Global Head of Forex Strategy

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Koon Chow
Emerging Markets Macro and FX strategist

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Thomas Christiansen
Senior Portfolio Manager
Head of EM Sovereign Debt

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