Lebanon’s former economy minister Alain Hakim said a recent rally in the country’s sovereign bonds was long anticipated, arguing that markets are reacting to political developments and a more favorable regional climate rather than signaling a full economic recovery.

In comments to The New Arab, Hakim said he had predicted the rebound as early as two years ago, before Lebanon elected a president, noting that bond prices tend to respond quickly to political milestones.

“I said at the time that once a president was elected and a government formed, prices would rise from six cents to 21 cents amid a positive trajectory,” Hakim said. “After the president was elected in January 2025, the market needed time to adjust. Prices rose gradually from 13 to 15 cents, then to 19 cents, paused for a while, and later reached 21 cents. Today, they are trading at between 25 and 26 cents to the dollar.”

Lebanese eurobond prices have climbed to 29 cents-on the dollar last week, marking their highest level since March 2020. 

Hakim said the rise has injected momentum into Lebanon’s reform track, even though those reforms remain incomplete. He cautioned, however, against interpreting the bond rally as evidence of a comprehensive recovery.

“This is not a full recovery in the absence of essential financial and banking policies,” he said, stressing that a durable exit from the crisis requires political coordination and a broad national consensus around a comprehensive plan. Such a plan, he added, must focus on rehabilitating the public sector, recovering deposits and safeguarding them.

Hakim also attributed the bond rebound to a more positive regional and international outlook toward Lebanon, underscoring the central role of geopolitics in shaping domestic economic conditions. Periods of de-escalation, he said, tend to reduce risk and push bond prices higher, while any sharp or confrontational rhetoric could quickly reverse those gains.

On the legislative front, Hakim said that despite reservations over the proposed “financial gap law,” the measure represents a positive starting point to end what he described as a state of “organized chaos,” pending amendments expected to be introduced by parliament.

He added that there are early signs of renewed investor confidence in Lebanon’s future, particularly as the country is placed back on a path of sovereignty and moves toward addressing the issue of illegal weapons and broader institutional disorder; factors he said were central to the financial and economic collapse that drove bond prices to record lows.