Lebanon’s economy of waiting

In The Autumn of the Patriarch, Gabriel Garcia Márquez imagines a country trapped in the long shadow of a ruler who seems to never leave. Time passes, but the country remains suspended: uncertainty becomes permanent, institutions grow weaker, and the future never quite begins.

Lebanon’s story is different, but the feeling of being stuck in economic time is familiar. Nearly seven years after the banking collapse, depositors are still waiting to know what will happen to their savings. Businesses and households are waiting for normal lending to return. Young professionals are deciding whether their future can still be built here. When delay lasts this long, waiting is no longer what people do before making a decision. It becomes the decision.

Some laws have finally started moving. But movement on paper is not yet recovery.

A recovery that barely began…

For a short while, Lebanon appeared to be moving again. The World Bank estimates that the economy grew by 4.2% in 2025, its strongest result since the crisis began in 2019. Tourism improved, spending picked up and some investments returned. But this was never a full recovery. Banks were still not lending normally, deposits remained restricted and much of the economy continued to run on cash.

Then came another conflict. The World Bank now expects the economy to shrink by 6.4% in 2026 as tourism slows, businesses hold back and displaced families face yet another period of uncertainty. Prices are adding to the pressure. In July, the cost of the goods and services measured by Lebanon’s Consumer Price Index was 15.7% higher than a year earlier.

The conflict helps explain why the brief recovery was interrupted. It does not explain why, almost seven years after the collapse, Lebanon still has no final answer for its banks or depositors. That delay began long before the latest war.

The laws are moving, uncertainty remains…

To be fair, something has changed. In August 2026, Parliament approved amendments to the Bank Resolution Law.  The law is meant to determine which banks can be saved, which need to be restructured and which can no longer continue. The IMF described the amendments as a major step, while making one point clear: passing the law is only the beginning. It still has to be applied.

Another question remains unanswered. Who will absorb the losses, and how will depositors recover their money? That is supposed to be addressed by the Financial Stabilization and Depositor Recovery Law. The government approved a draft in December 2025, but it has not yet completed the parliamentary process. Discussions with the IMF are still continuing over how the losses should be divided and how much the state can realistically contribute.

In the meantime, depositors continue to receive limited monthly amounts under BDL circulars. These withdrawals may help people cover immediate expenses, but they do not tell them when their savings will be returned or how much they will ultimately recover. Progress has begun, but the answer people have been waiting for is still missing.

What does waiting do to an economy?

Waiting may sound passive, but it changes the way people behave. When a family does not know when it will regain access to its savings, it becomes more careful about spending and planning. A new car can wait. So can home repairs, a business idea or a long-planned move. That caution grows when prices continue to rise.

Businesses make similar choices. Why expand or hire when bank financing is barely available and customers are watching every dollar they spend? Even a healthy company may decide to hold on to its cash and wait for more certainty. One delayed decision may not matter much, but thousands of them do.

Young Lebanese face a more personal choice: wait for conditions to improve or build a future somewhere else. In a 2024 Arab Barometer survey, 58% of respondents aged 18 to 29 said they wanted to leave Lebanon. Among those considering migration, economic conditions were the most common reason.

Each decision makes sense on its own. But when all three happen at the same time, spending slows, investment is postponed and the country risks losing people it needs for its recovery. The longer the uncertainty lasts, the more waiting begin to sustain itself.

A banking crisis is not only about deposits…

When banking reform is discussed in Lebanon, the conversation usually returns to deposits. That is understandable. People want their money back. But the damage goes further.

In a working banking system, savings do not simply sit in accounts. They help finance the economy. In Lebanon, that chain is broken. Those who already have cash or support from abroad may still be able to move forward. Others have little choice but to wait. This matters even more when the country needs reconstruction. Donations and foreign support can rebuild damaged roads, homes and public services, but an economy cannot depend indefinitely on aid and cash. It also needs banks that people trust and that can lend again.

Until that happens, opportunity will continue to depend heavily on who already has money available. The banking crisis is not only holding old savings in place. It is also limiting what people can build next.

When waiting becomes normal…

Lebanese people have become very good at adjusting. That ability has kept families, businesses and much of the economy going. But it can also hide the cost of delay. Survival can easily be mistaken for recovery.

The recent banking amendments matter. So do the audits, ongoing negotiations and withdrawal arrangements. But Lebanon cannot recover by asking people to wait more patiently.

Recovery begins when families and businesses can make plans again, and when staying no longer feels like the riskier choice.  The future starts when people no longer have to build their lives around decisions the state keeps postponing.