The international credit rating agency Moody’s has commented on the election of former army commander Joseph Aoun as Lebanon’s new president, describing it as a critical step toward forming a fully empowered government. 

In its latest report on Lebanon, Moody’s emphasized that restoring the full functionality of state institutions is pivotal to sustaining the ceasefire agreement signed on November 26, 2024, and securing much-needed international funding. The agency noted that Lebanon’s recent conflict caused an estimated $8.5 billion in damages, including $3.4 billion in infrastructure losses, exacerbating the country’s economic woes.

In its economic outlook, Moody’s forecasted a contraction of approximately 10% in Lebanon’s GDP for 2024. However, the agency expressed optimism for economic recovery in 2025, contingent on the continuation of the ceasefire and political stability. The agency affirmed Lebanon’s current credit rating of “C,” reflecting its assessment that holders of Lebanese Eurobonds will likely recover no more than 35% of their value after restructuring.

Moody’s highlighted that unlocking international donor funds hinges on implementing critical reforms, including comprehensive debt restructuring—a prerequisite for sustainable economic recovery. 

While fiscal and investment spending restraints have helped stabilize the exchange rate and prices, Moody’s cautioned that these measures come at the expense of long-term growth. It stressed that reducing Lebanon’s government debt-to-GDP ratio—projected to reach 150% by the end of 2024—is essential for achieving debt sustainability.

A United Nations report on the global economic outlook for 2025 shed further light on Lebanon’s economic struggles, revealing that the country's GDP shrank by 4% in 2024, largely due to the escalation of hostilities with Israel in October.

The report underscored the slow pace of Lebanon’s economic recovery, which remains hampered by the lingering effects of a severe financial and economic crisis that occurred between 2018 and 2020. Nonetheless, it noted that the stabilization of the exchange rate has driven inflation down significantly—from a staggering 269% in April 2023 to 16% in October 2024.

According to the UN report, the destruction of critical infrastructure during the recent conflict has further delayed Lebanon’s recovery. The Lebanese economy is expected to contract by 2% in 2025 but achieve modest growth of 0.8% in 2026.

Inflation rates are projected to decline steadily, from 221.3% in 2023 to 67.4% in 2024, and further to 41.3% in 2025 and 35.1% in 2026. Despite these improvements, significant challenges remain, with the need for structural reforms and sustained international support deemed essential for long-term recovery.