AGP Executive Report

Business Links: The U.S. decision to lift restrictions on direct flights to Lebanon could make it easier for American businesses to explore investment opportunities, the U.S. Embassy in Beirut said. Innovation: Beirut’s Experia expo wrapped up with more than 100 exhibitors showcasing technology and business opportunities, alongside workshops and startup pitches. Trade: Lebanon’s exports to Iraq topped $595 million in the second quarter of 2026. Energy & Recovery: Prime Minister Nawaf Salam has outlined plans for cheaper power, more than 250 buses and tougher tax collection, while Lebanon is considering three-year solar loans under its 2027 budget.

Trade: Lebanon’s exports to Iraq jumped 67.2% in Q2 to about $597 million, led by unwrought gold, which rose to $204 million. Copper, lead, fertilizers and food products also featured. Air Links: The US lifted restrictions on direct flights to Lebanon imposed after the 1985 TWA hijacking, opening the door to future service. Flights have not resumed, and a US travel advisory remains in place. Energy Costs: Lebanese diesel prices rose 73.6% from February to August, the second-steepest increase among countries tracked by UNCTAD, adding pressure on businesses and households. Infrastructure: Prime Minister Nawaf Salam has outlined plans for cheaper electricity, more than 250 new buses and tougher tax collection, while the government has stressed monetary stability and reforms as priorities for recovery.

Trade: Lebanon’s exports to Iraq jumped 67.2% in the second quarter to nearly $597 million, led by unwrought gold, which rose to about $204 million. Air Links: The US has lifted its decades-old restrictions on direct flights to Lebanon, but routes will not resume immediately: aviation talks are expected in November, and safety requirements still need to be strengthened. Fuel Costs: Lebanon recorded the world’s second-largest diesel price increase from February to August, at 73.6%, adding pressure on households and businesses. Energy and Security: Lebanon is planning three-year solar loans under its 2027 budget, while the EU is preparing a mission to support the Lebanese armed and internal security forces ahead of UN peacekeepers’ planned withdrawal.

Fuel Shock: Lebanon recorded a 73.6% rise in diesel prices from February to August, the world’s second-steepest increase, UNCTAD reported. Higher energy costs are squeezing households and businesses. Economic Measures: Prime Minister Nawaf Salam has outlined plans for cheaper power, more than 250 new buses and tougher tax collection, while also pledging to protect monetary stability and purchasing power. EU Support: Brussels is preparing a security mission to advise Lebanon’s armed and internal security forces as UN peacekeepers prepare to withdraw; approval is expected to be considered on October 12. Recovery at Risk: A fresh Israeli drone strike in eastern Lebanon injured six people, underscoring the fragile security environment as a US-brokered framework links military steps with reconstruction and economic recovery.

Electricity Crunch: Energy Minister Joe Saddi is weighing resignation as a cabinet dispute stalls plans to clear $250 million in state debts to Electricité du Liban. A proposed $50 million credit falls far short, putting promised power-supply and tariff reforms at risk. Recovery and Sovereignty: Prime Minister Nawaf Salam says economic reform, reconstruction and restoring state authority must advance together, with security and accountable institutions key to rebuilding public trust. Energy and Transport: The government is planning three-year solar loans under the 2027 budget, alongside proposals for cheaper power and more than 250 new buses. Trade Links: Beirut and Tripoli ports are joining a wider trade network through the IMEC Ports Club, offering a potential boost to Lebanon’s regional connections. Regional Headwinds: The World Bank forecasts the Middle East economy will shrink 2.1% in 2026 amid the Iran conflict, adding pressure to Lebanon’s fragile recovery.

Cost-of-Living Measures: Prime Minister Nawaf Salam outlined plans to ease pressure on households, including cheaper power, more than 250 buses and tougher tax collection. A separate 2027 budget proposal would offer three-year solar loans. Displacement Aid: Hezbollah says it is nearing shelter payments to families displaced by the war; Reuters reported the group received $200 million from Iran, a claim disputed by the US State Department. Reconstruction: Lebanon’s two recent wars have caused more than $20 billion in damage, Salam told parliament, with costs potentially exceeding $27 billion. Rebuilding will require cement and aggregates, while millions of tonnes of rubble could be reused. Regional Outlook: The World Bank forecasts the Middle East economy will shrink 2.1% in 2026, adding to an already difficult climate for Lebanon’s recovery. Trade Links: Lebanon is moving closer to a proposed Beirut–Tripoli connection to the India-Middle East-Europe trade corridor.

Solar Financing: Lebanon’s 2027 budget sets aside $11 million for about 4,400 household solar loans, averaging $2,500 and repayable over three years. The plan aims to cut generator bills for families unable to afford systems upfront. Economic Reform: President Joseph Aoun reiterated Lebanon’s commitment to reforms and a financial gap law to clear the way for an IMF deal. Prime Minister Nawaf Salam has also outlined cheaper power, more than 250 new buses and tougher tax collection; Salam separately stressed monetary stability and protecting purchasing power. Trade and Investment: Lebanon is moving closer to a Beirut–Tripoli route linked to the India-Middle East-Europe Economic Corridor, while the economy minister met an EBRD delegation to discuss reforms and private-sector support. Regional Outlook: The World Bank expects MENAAP economies to shrink 2.1% in 2026, adding to pressure on a country already facing a deepening cost-of-living crisis.

Household Costs: Prime Minister Nawaf Salam says the government is working to expand reliable, lower-cost electricity and plans housing loans for families installing solar systems. A public transport plan with more than 250 buses is also in preparation. The government is pursuing VAT evasion and unpaid quarry and mining dues to raise revenue. Reform and Funding: President Joseph Aoun says Lebanon is committed to economic reforms and passing a financial gap law to clear the way for an IMF deal. The EU has offered support for state institutions, including the army and security forces. Trade Links: Efforts to connect Beirut and Tripoli ports with wider regional trade networks through the IMEC corridor could create new routes for Lebanese commerce. Financial Dispute: Reuters reported a $200 million Iranian transfer to Hezbollah for displaced families; the US rejected the claim, calling it false as cash-strapped households in Iran questioned overseas spending.

Displacement Aid: Hezbollah says it secured $200 million from Iran to help Lebanese displaced by this year’s war, but Washington disputes the claim. The group says it will announce a distribution plan. Trade and Infrastructure: Beirut and Tripoli ports have joined the IMEC Ports Club, bringing Lebanon closer to a proposed India–Middle East–Europe trade corridor. Turning that opening into business will depend on investment in transport, digital links and customs systems. Economic Pressures: Lebanon’s cost-of-living crisis is worsening amid instability and long-standing economic weaknesses. President Joseph Aoun warned against politicizing claims of currency turmoil, saying officials are working to maintain monetary stability and improve public administration.

Power Sector: Energy Minister Joe Saddi says Lebanon’s power plants meet only about a third of demand, leaving households reliant on private generators. He blamed decades of underinvestment and said private investors need security, political stability and financial guarantees before committing to new plants. Trade Routes: Egypt, Lebanon, Oman and Cyprus have expressed interest in joining the India-Middle East-Europe Economic Corridor, with a ministerial meeting expected to consider expansion. Separately, CMA CGM will add Iskenderun to a service linking Beirut with Jeddah, Duqm, India, Colombo and Djibouti from Oct. 12, opening another route for regional cargo. Agriculture: Lebanon’s agriculture minister met his Spanish counterpart to discuss cooperation on irrigation, water reuse and agricultural insurance, building on a bilateral agreement signed in February. Regional Outlook: The World Bank expects the Middle East economy to contract 2.1% in 2026 amid the Iran war, a warning for Lebanon as regional conflict and trade disruption weigh on recovery.

Lebanon’s Trade & Ports: Lebanon is set to plug into the IMEC corridor more concretely, with Beirut and Tripoli named in the IMEC Ports Club declaration—an effort meant to boost trade, energy and connectivity, but success will hinge on real cross-border cooperation and investment. Lebanon’s Electricity Crisis: Lebanon’s power breakdown is framed as a punishment, while new pressure is building on the government over EDL arrears and electricity reforms, with calls for political action. Regional Economic Pressure: The World Bank warns that the Middle East’s economic strain is hitting households hard, citing sharp fuel price jumps in Lebanon and rising fiscal stress as debt climbs. Lebanon-Security Stakes: Hezbollah leader Naim Qassem renewed demands for full Israeli troop withdrawal from southern Lebanon, keeping the spotlight on the fragile security transition as UN forces’ timeline approaches. Business Appointments: Deliveroo appointed Vasilis Hadjiaslanis as GM for the Middle East, aiming to accelerate growth across consumers, merchants and riders.

Lebanon Electricity Crunch: Energy Minister Joe Saddi says he will boycott Cabinet sessions until Lebanon settles EDL arrears and exemptions, warning the core problem is only one-third of demand being met and pushing for private-sector investment with financial and security guarantees; he also calls for a fuel-linked dynamic tariff and tackling non-technical losses (about 30%). Environment & Investment: Environment Minister Tamara El Zein met France’s ambassador to expand cooperation, aiming to attract French/European funding for waste management, citing updated solid-waste strategy, a new authority, and cost-recovery rules. South Lebanon Governance: Speaker Nabih Berri is pressing for de-escalation between PM Nawaf Salam, Hezbollah and southern residents, with Salam’s Nabatieh push framed around restoring state authority and launching tenders for roads, hospitals, power and civil defense. Regional Trade Connectivity: France says Egypt, Lebanon, Oman, Greece and Cyprus are interested in joining IMEC, with a ministerial meeting expected later this year. Labour Rights Snapshot: A new Labour Rights Index reports most countries still fall short on access to decent work, highlighting ongoing legal reform needs. Humanitarian Pressure on Lebanon: UNICEF-linked reporting warns war is pushing children out of school and into hunger and work, as families struggle to survive.

Lebanon Economy & Finance: Lebanon’s reform push stays in focus as Economy Minister Amer Bisat met an EBRD delegation to discuss governance modernization, public-sector support, and financing for private sector, industry, renewables, and SMEs. IMF & Banking Reform: Lebanon’s IMF talks face a fresh test as the banking reform law is challenged, with the IMF set to assess potential changes to the bank resolution framework. Regional Security With Local Impact: The war backdrop remains heavy for Lebanon’s economy and stability, with renewed reporting on Israeli strikes in southern Lebanon and the broader Middle East security order reshaped by the Iran conflict. Sanctions Risk for Finance: The US Treasury warned foreign financial institutions that doing business with Iran-linked sanctioned entities could trigger sanctions without advance notice—raising compliance pressure across the region’s financial networks. Energy & Trade Pressure: China-EU trade tensions are escalating into autos, tech, agriculture, and chemicals, with tariffs and countermeasures likely to ripple into regional supply chains. Lebanon’s Social Strain: A report highlights how Lebanon’s war is disrupting education, putting around 100,000 children at risk of missing school.

Southern Lebanon Security: Israel carried out renewed shelling and detonations around Haddatha, Baraachit, Mansouri and Majdal Zoun, despite the June framework on security arrangements and gradual Lebanese army deployment. State Authority in the South: PM Nawaf Salam visited Nabatieh to push reconstruction funding and restore state control, while warning the gap between political commitments and on-the-ground delivery remains wide. Lebanon’s Political Debate: Kataeb MP Sami Gemayel urged the state to execute decisions now, arguing Lebanon must be liberated from Hezbollah-Iran hegemony and that dialogue or postponement is no longer an option. Regional Military Training: UK and Lebanese troops launched Exercise “PEGASUS CEDAR 2026,” with British SCOTS personnel joining Lebanese forces for three weeks of tactical training, with US and Italy participation and other regional observers. Lebanon’s Humanitarian/Education Strain: Lebanon’s war has disrupted schooling for a generation, with UN-linked reporting citing bombed facilities, converted schools as shelters, and children at risk of missing classes. Food Security Watch: UN Women warned 11.7 million more women and girls could face food insecurity by end-2026, including Lebanon’s female population. IMF and Banking Reform Pressure: Reports say Lebanon’s IMF talks face a new test as the banking reform law is challenged and the IMF prepares further assessment of bank resolution changes.

IMF & Lebanon’s banking reform: Lebanon’s IMF talks face a fresh test as the President challenges a banking reform law, while the IMF is set to assess possible changes to the bank resolution framework—key for any support deal. Electricity & cost pressures: Lebanon’s electricity tariff dilemma is back in focus, with the public weighing higher costs for EDL versus relying on generators. Reconstruction & state capacity in the south: Despite a June Lebanon-Israel framework, implementation hurdles remain as Israeli strikes hit southern Lebanon; locally, Hezbollah MP Hasan Fadlallah argues the state must establish presence in the south before any talk on arms monopoly. Regional escalation with business impact: Saudi-backed Yemen’s government announces a major campaign against the Houthis, raising risks for Red Sea shipping and energy markets. Iran-US energy standoff: Iran says reopening the Strait of Hormuz hinges on seven US preconditions, keeping global trade uncertainty elevated. Lebanon economy & growth themes: A roundup highlights Lebanon’s wineries struggling with war and weak demand, while another report points to Lebanon banks on mass AI training to rebuild parts of the economy.

Lebanon–Israel Security: Israeli forces reportedly blew up a school and set homes on fire in Houla, while artillery and airstrikes hit multiple towns across southern Lebanon despite a ceasefire framework, underscoring how fragile “de-escalation” remains. State Authority Debate: Hezbollah MP Hasan Fadlallah said the Lebanese government must first establish an effective presence in the south before discussing any “arms monopoly,” linking dialogue on defense strategy to an Israeli withdrawal. Regional Energy & Trade: Iran reiterated it will not reopen the Strait of Hormuz until seven U.S. preconditions are met, including ending a naval blockade, lifting oil bans and sanctions, and halting military action affecting regional groups—raising new uncertainty for global energy flows. Lebanon Economy & Aid Pressure: UN officials warned about the impact of the latest Lebanon war on agriculture and food supplies, as displacement and economic strain deepen. Lebanon Business & Tech Links: Armenia’s ambassador to Lebanon met Nicolas Rouhana to discuss cooperation to connect Armenian and Lebanese tech ecosystems, focusing on startups, investors, and partnerships.