The ongoing conflict between Israel and Hezbollah, exacerbated by the death of Hezbollah leader Hassan Nasrallah and Israeli military actions, threatens to extend into 2025, with serious implications for Lebanon’s fragile economy and political stability, according to S&P Global Ratings. The conflict has already led to significant human displacement, with around one million people affected, further straining the nation’s resources, which are already burdened by hosting approximately 1.5 million Syrian refugees. S&P has placed Lebanon’s foreign-currency rating at ‘SD’ (Selective Default) due to the government’s persistent inability to meet its foreign currency obligations since March 2020, while local-currency ratings remain ‘CC/C’ amid heightened default risks. The political fragmentation and delays in critical governance reforms are expected to hinder recovery efforts, pushing Lebanon deeper into crisis.
