Lebanon offers reasons for optimism in the Middle East and so could Syria if it can achieve stability, a senior S&P executive has said.

The new government and economic plan in Beirut puts it on a better economic trajectory, S&P Global Commodity Insights vice president Roger Diwan told The National during the CeraWeek conference in Houston.

In Syria, there was a need to push for stability after recent violence, Mr Diwan added.

“We have a government [in Lebanon] … They have plans to try to fix the economy,” Mr Diwan said. “That's better than where we were a few weeks ago.”

Lebanon's parliament elected army chief Joseph Aoun as President in January, which ended a power vacuum that had existed since 2022. Mr Aoun selected Nawaf Salam as Lebanon's Prime Minister and he has vowed for a new era “rooted in justice, security, progress and opportunities”.

However, the country's struggling economy will take time to recover, with the Israel war further exacerbating the challenge.

Lebanon's real gross domestic product contracted by 7.1 per cent last year because of the war, “a significant setback compared to a no-conflict growth estimated at 0.9 per cent”, a recent World Bank report said. The country's GDP has declined nearly 40 per cent since 2019, with the war further compounding the economic crisis.

Reconstruction and recovery will cost about $11 billion, with $3 billion to $5 billion needed to be publicly financed, including $1 billion for the country's infrastructure alone. Private financing is required for about $6 billion to $8 billion of the costs, mostly in the housing, commerce, industry and tourism sectors, the World Bank said earlier this month.

“The conflict further compounds an ongoing prolonged downturn, exacerbated by sovereign default, sharp currency depreciation, a systemic banking crisis, limited capital investment, and deteriorating public services,” the report said.

“The destruction of capital stock and skilled labour migration further erodes Lebanon’s economic potential, posing significant risks to long term growth.”

Staff from the International Monetary Fund were due to visit Lebanon this week to hold talks with authorities on its reconstruction and recovery needs.

Syria can also be a point of optimism “if we have a stabilisation” there, Mr Diwan said. The country has seen recent clashes between pro-government forces and those loyal to the fallen regime of former president Bashar Al Assad.