Standard & Poor’s Global Ratings (S&P), the international rating agency, raised on February 13, 2026 Lebanon’s long-term local currency rating to “CCC+” from “CCC” previously while maintaining the country’s stable outlook. In the meantime, the rating agency maintained the country’s long-term and short-term foreign currency (FC) ratings at “SD”, and the short-term local currency (LC) rating at “C”. The rating agency attributed the rating upgrade to the government's improved ability to manage its local debt, thanks to three consecutive years of budget surpluses and progress achieved on the reforms needed for a new IMF program. According to the rating agency, Lebanon’s government has made some progress in passing laws that are considered as a prerequisite to unlock a new IMF financing program and moving ahead with debt restructuring. More specifically, S&P noted that the Cabinet has approved the Financial Stabilization and Deposit Repayment Act (a.k.a. the Gap Law) in December 2025 while at an earlier date in 2025 the Parliament ratified the amended Banking Secrecy Law and approved the Bank Restructuring Law. The rating agency stated that it expects reform progress to reduce funding constraints yet noted that said process would be gradual given the expected May 2026 elections along with the limited progress on other reforms, namely the medium-term fiscal framework and the amendments of banking laws to align them with international standards. In addition, S&P stated that Lebanon’s sovereign ratings show the government’s ability and willingness to service financial obligations to commercial creditors. Always in the same vein, the rating agency stated that it does not expect local currency debt to be included in a government debt-restructuring plan under its base-case scenario. In addition, S&P commented that the 98% depreciation of the Lebanese pound since the onset of the crisis in late 2019 has sharply reduced the value of LBP-denominated debt to below 1% of GDP (or ~1% of gross general government debt) at end of 2025. The agency also mentioned that the Lebanese government had stopped making interest payments on local currency debt to BDL between the years 2021 and 2023, yet these payments resumed in 2024 and all accrued interest was settled in 2025. S&P commented that it could lower the LC rating within the next twelve months in the event of increased odds of the inclusion of local currency debt in a restructuring exercise, while ratings can be upwardly revisited in the event additional progress is achieved on reforms that would eventually lead to better fiscal results, economic growth, and pave the way to concessional external funding.

On the other hand, the rating agency commented that it considers the policy challenges for Lebanon as substantial. In details, and given the small timeframe until parliamentary elections in May 2026 alongside the uncertainty surrounding the precise timing of elections, S&P noted that it does not expect any major progress on debt restructuring in the near-term. The agency highlighted that what aggravated the country’s recovery journey is the latest conflict with Israel, which affected Lebanon’s economic prospects, bearing in mind that the implementation of the November 2024’s ceasefire remains fragile. In parallel, the rating agency stated that it does not expect major progress on public debt restructuring in 2026 considering the slow progress on banking sector reforms and deposits recovery. Furthermore, and despite the unstable security situation, S&P expects the Lebanese economy to grow slowly due to a stronger reconstruction activity, a promising tourism sector recovery, and improved political environment.

The rating agency mentioned that it expects the Lebanese authorities to continue prioritizing reforms that target rebuilding the economy and improving governance. The agency added that since the formation of the government in early 2025, the latter has achieved remarkable progress on a set of reforms required for a potential IMF board approval of an Extended Fund Facility Program, the details of which are provided in the table below:

The rating agency also pinpointed a list of other reforms required to unlock external financing such as a medium-term fiscal plan, a banking sector restructuring law, reforming state-owned enterprises, and strengthening the Anti-Money Laundering & Combating the Financing of Terrorism legislation. Reforms execution risk remains elevated, however, according to the agency given the short timeframe before the parliamentary elections in May 2026 and strained security situation with Israel.

Standard & Poor’s added that barring the slight post-pandemic rebound in the 2021-2023 period, the country’s economy has been contracting in real terms since 2018, with real GDP shrinking from $55 billion in 2018 to $37.5 billion in 2024. S&P estimated GDP however to have expanded by about 3.5% in real terms in 2025 after having contracted by 6.5% in 2024. In the same vein, the rating agency expects economic growth to remain somewhat stable in the 2026-2029 forecast period fueled by a diversified service sector recovery and consumption, as well as improved liquidity conditions due to rising fresh Dollar withdrawal limits and strong influx of remittances. The rating agency added that the official exchange rate has been stable at the LBP 89,500/USD level since February 2024. S&P stated that it expects the exchange rate to remain mostly stable in 2026 followed by a “modest depreciation”. In addition, the agency noted that it expects net general government debt as a percentage of GDP to continue its gradual decline, dropping from 232.9% in 2022 to 81.9% in 2025 and a projected 76.7% in 2026.

S&P added that it excludes gold and some $7 billion of banks’ required reserves on FC deposits from gross reserves to arrive at usable reserves. In the same vein, the rating agency stated that gross reserves (including gold) stood at circa $54 billion as at January 15, 2026, of which some $12 billion are in the form of liquid foreign assets. According to S&P, Lebanese laws prohibit the sale of BDL’s gold holdings unless the Parliament ratifies a new law to allow the sale of gold and hence S&P views that gold is not readily available for foreign exchange operations and repayment of external debt. S&P projected the current account deficit to drop to an average of 11% over the 2026-2029 period, from an average of 16% over the 2023-2025 period, yet commented that this figure remains elevated and can be financed by remittances and resident foreign currency savings. Finally, the rating agency pointed out that average annual inflation ebbed to 14.8% in 2025 down from 221.3% in 2023, while expecting inflation to remain below 10% in the 2028-2029 period.