On August 15, Standard & Poor’s Global Ratings (S&P) raised Lebanon’s long-term local currency sovereign rating to ‘CCC’ from ‘CC’ and revised the local currency outlook to “Stable” from “Negative.”

LIMS explained that the upgrade of Lebanon’s local currency rating reflects an improved capacity to service debts denominated in Lebanese pounds. This development is primarily attributed to recent budget surpluses and the significant reduction of local currency debt, which now totals only about $1 billion due to the devaluation of the Lebanese pound. The outlook has also been supported by renewed optimism over a potential IMF agreement under the new reform-oriented government. However, the country’s foreign currency rating remains at “Selective Default” (SD), as negotiations with international creditors over unpaid dollar-denominated obligations are stalling.

LIMS emphasized that further progress on sovereign ratings will depend on the government’s ability to sustain budget surpluses through public sector restructuring, banking sector revitalization, and measures to attract foreign investment. Continued implementation of reforms, particularly in the electricity and telecommunications sectors, will also be essential. Nevertheless, the outlook remains “stable” rather than “positive”, reflecting both the government’s limited time in office and the structural nature of reforms, which require time to produce measurable results.

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