This report assesses the business environment in Lebanon, focusing on the regulatory environment, stability of the financial system, FDI intake, labour market flexibility and skillset, trade openness, mobility infrastructure, ICT adoption and innovative capabilities. Companies can evaluate these factors to understand the strengths and weaknesses of a country’s business environment for better strategic investment decisions.

The report examines the economic landscape of Lebanon and provides information on major monetary indicators, foreign trade and government finance. The economy contracted in real terms in 2024, dragged down by lack of enough private consumption, less government spending and investments. Furthermore, a global economic slowdown, increasing geopolitical tensions and economic fragmentation as well as tight financial conditions pose risks to the country’s economic outlook.

The number of households is set to increase moderately, while the average household size will remain unchanged in Lebanon over 2024-2029. Couples with children will remain the dominant household type but the fastest household expenditure growth is forecast to be recorded by single person households. In addition, the share of households living in urban areas is projected to expand to 90.9% by 2029.

Insight into income, wealth and expenditure of consumers and households is vital in helping businesses make strategic decisions with regards to which country (or even which region within a country) to enter, which consumer segment to target, which products or services to market, and at which price point. Other factors such as the size and expansion of the middle class and income inequality are also important in helping companies gauge the potential of a country market.

Despite all of the negative trends affecting Lebanon, including the country’s economic and financial collapse, but also the presidential vacuum and political instability, the market started to see a recovery in 2022 and into 2023. This was driven by an increase in diaspora remittances, a private sector recovery, and positive tourism and hospitality indicators all of which supporting the recovery of alcoholic drinks sales in Lebanon. However, this recovery came to somewhat of a standstill in Octo

Tobacco saw volume sales rise in Lebanon in 2024. Despite the global trends in smoking habits, which are generally declining, smoking prevalence in Lebanon remains very high with little effort to limit or reduce smoking. There are no awareness campaigns, or they are very few and very limited, and the price of tobacco remains very affordable compared to some other countries and compared to Europe and the US.

Lebanon continued to be impacted by elevated inflation in 2024 which led to a sharp rise in the cost of living. High unemployment and a lack of trust in the local currency and the local banking system also continued to undermine consumer confidence which negatively impacted spending on non-essential purchases. Additionally, the spillover effect from the Israel-Hamas war in the south of Lebanon also harmed the local economy.

The population of Lebanon is predicted to increase by 14.0%, due to changes in net migration and natural change, standing at a total of 6.6 million citizens by 2040. Demographic changes, economic conditions and social trends are all contributing to negative net migration. Lebanon’s birth rate is also expected to fall between 2024 and 2040. By 2040, the largest cohort of people will be middle-aged (aged 45-64).

Tissue and hygiene saw strong growth in current value terms in Lebanon in 2024, but this was due to high inflation and rising prices rather than an increase in demand with sales declining in retail volume terms. A number of factors were behind the drop in volume sales including the country’s declining disposable income, economic challenges, and Lebanon’s declining birth rate.

Home care saw volume sales decline in Lebanon in 2024. Demand remained under pressure from a contracting population due to a high rate of emigration, and the reluctance of cash-strapped consumers to spend on products that were seen as non-essential. Within the context of the socioeconomic crisis, this meant that most consumers stuck to the absolute basics. Consumers also shifted to multi-functional products that were see as offering good value for money, such as multi-purpose surface cleaners.

Lebanon remains embroiled in an economic crisis with elevated inflation and a weak local currency negatively impacting consumer purchasing power, while local businesses have seen their margins squeezed. Added to this, political instability and deteriorating infrastructure continues to present challenges with homes and businesses having to rely on generators for electricity. Despite this, hot drinks saw strong growth in volume terms in 2024 with coffee remaining a popular hot drinks option.

Lebanon remains embroiled in an economic crisis with elevated inflation and a weak local currency negatively impacting consumer purchasing power, while local businesses have seen their margins squeezed.. Added to this, political instability and deteriorating infrastructure continues to present challenges with homes and businesses having to rely on generators for electricity. Despite this, soft drinks saw strong growth in volume terms in 2024 with bottled water a necessity in Lebanon.

Lebanon remains embroiled in an economic crisis with elevated inflation and a weak local currency negatively impacting consumer purchasing power, while local businesses have seen their margins squeezed.. Added to this, political instability and deteriorating infrastructure continues to present challenges with homes and businesses having to rely on generators for electricity.

Lebanon remains embroiled in an economic crisis with elevated inflation and a weak local currency negatively impacting consumer purchasing power with many consumers struggling to afford basic essentials, while local businesses have seen their margins squeezed.. Added to this, political instability and deteriorating infrastructure continues to present challenges with homes and businesses having to rely on generators for electricity while roads and transport have been neglected.

This report covers the retail sector in frontier markets in the Middle East and North Africa. Euromonitor International’s definition of the region includes the following countries

Soaring inflation and a sharp decline in the exchange rate of the local currency have severely affected Lebanon’s economy. Political instability combined with the Israel-Hamas War is impacting the development of consumer health. The country remains without a president or fully-functioning government, which is paralysing reform progress and thus blocking foreign financial assistance. Imported consumer health products continue to suffer from frequent shortages and persistent supply problems caused

While Lebanon has faced a severe economic crisis and the negative impact of the Israel-Hamas War, dairy has remained resilient due to its established place in the local diet and status as key to Lebanon’s agriculture sector. Although dairy remains part of the daily diet of almost all Lebanese people, the frequency of consumption has fallen as incomes have dropped. In 2024, the economic situation has stabilised, though the consumer base has become increasingly polarised.

Volume sales of snacks in Lebanon increased modestly in 2024 as consumer spending recovered somewhat amidst a slight easing of the socioeconomic crisis and inbound tourism boomed. Numerous local manufacturers have benefited from the unavailability and unaffordability of imported products and international brands, carving out strong positions in key categories such as potato chips, nuts, seeds and trail mixes, sweet biscuits and ice cream by appealing to demand for high quality at low prices.

Corruption and political instability are impeding economic freedom, whilst the public-debt-to-GDP ratio is one of the highest globally. Although the economy is relatively well diversified, uncertainty could hamper its development and hyperinflation is severely impacting consumers. Most of the population is experiencing poverty, which is hastening brain drain, whilst refugees face discrimination. Internet use is solid, but mobile subscriptions have fallen and could delay 5G penetration.