Diaspora-led tourism breathes life into an otherwise depressed consumer outlook in Lebanon

An estimated US$ 9–13 billion will flow into Lebanon through tourism and remittances, keeping consumer spending afloat amid acute economic crises

Businesses operating in Lebanon should maintain their mitigation strategies through H2 2023 and 2024, focusing on capturing the sporadic opportunities arising in the tourism-driven consumer segment while protecting themselves from the protracted financial risk in the market. Despite ongoing currency and economic crises in Lebanon, the lira will see small appreciations in the black-market rate, driven by FX inflows from the visiting diaspora. Multinationals should approach 2024 with a business plan that assumes no growth in the addressable market size, as the middle-income bracket will remain depressed through the medium term.


Political and security risks in Lebanon rose especially high in early August, as clashes ensued in the refugee camps with tensions in the surrounding areas in Saida, south Lebanon. GCC embassies are calling for their tourists to leave Lebanon. Furthermore, little to no progress has been made in agreeing on a new president, with political rifts growing wider. The now former Banque du Liban (central bank) governor, Riyadh Salameh, was recently replaced by a deputy governor, a member of the Amal party, further eroding any resemblance of independence for the central bank. Elsewhere, public officials expect tourism to bring in nearly US$ 9 billion this year, with remittances also rising 6% YOY in 2022 to US$ 6.4 billion.  Consumer spending will improve in the short term, driven purely through the pickup in tourism spending. However, inflation remains high, averaging 254% in June. New telecom and internet tariff hikes will see prices rise sevenfold.

Our View

FrontierView sees private spending growing a mere 1.1% in 2023 and a more improved 3.9% in 2024; however, the total size remains far below pre-September 2019 levels. The lira will see a short episode of appreciation in August before falling again closer to LL 90,000 until December 2023, with the swings driven by tourism-funded FX inflows. The lira will average LL 77,865 and 90,250 in 2023 and 2024, respectively, on the Sayrafa rate. On the political front, the new leadership at the central bank will likely result in further erosion of the weak independence of central bank policy, generating a wider rift among political parties and raising barriers for any possible reforms.

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