Ali Bolbol, head of the economic research department at BlomInvest, said that this is all the more “surprising” given that for most of the month, Israel was bombing Lebanon extensively in several regions, without, however, hitting Beirut’s port or airport. Even the cease-fire that came into effect on Nov. 27 was almost immediately violated by the two parties — notably by Israel which continues to bomb, shell and advance its troops in southern Lebanon — and remains fragile.

The index, published by BlomInvest, assesses the economy’s state based on surveys of purchasing managers at 400 local companies. A value below 50 points indicates a slowing down of economic activity and a negative outlook; conversely, a score above 50 reflects growth. On the other hand, a month-on-month rise in the index, even below 50 points, signals a less marked slowdown and is interpreted as a relative improvement.

Export recovery

For Bolbol, Lebanon’s PMI score is “good news,” as it shows that “the economy was able to steady itself somewhat after the severe slump in October, driven by signs of recovery in exports and in domestic demand. The latter seems to have been positively affected by the need to replenish inventories and to provide for the massive internal refugees.”

Many people have fled the areas bombed by Israel — Beirut's southern suburbs, South Lebanon and the Bekaa — to seek refuge in other parts of the country, either in centers or by renting private accommodation. According to the International Organization for Migration, at least 875,000 persons have been displaced, not including those who have left the country.

It was this internal demand that helped stabilize business activity. More specifically, the PMI sub-index measuring output rose by 4.5 points to 46. The “New orders” sub-index followed a similar trajectory, climbing to 46.4 points, while the "New export orders" sub-index saw a significant surge, jumping by 13 points to reach 44.2 points.

Bolbol also highlighted the positive impact of the “injection of U.S. dollar liquidity” by Banque du Liban (BDL). In November, the central bank increased the amounts depositors can withdraw from their dollar accounts, which were illegally frozen at the start of the crisis in 2019. This derogation from two of its circulars was initiated a month earlier, and BDL announced at the end of November that it would implement the same measure in December.

Bolbol concluded his analysis with a pious wish: “We hope the good news is reinforced by a quick end to the war and to all armed presence in the country [other than that of the Lebanese Army], as well as the election of a new president and the formation of a reforming government.”

According to the World Bank (WB) and the Institute of International Finance, Lebanese GDP is set to contract by seven percent in 2024. The WB pointed out that the cumulative decline in GDP stands at 34 percent since 2019, the year the country plunged into the worst economic and financial crisis in its history. It also estimated that the war-related economic losses exceeded $5.1 billion, with the cost of destruction amounting to more than $3.4 billion.