05 February 2009

* BMI sees lower growth rate for Lebanon in 2009

BMI revised downward its growth projection for the Lebanese economy for 2009 to 2.5 percent from 4.5 percent, citing negative external conditions, infrastructure shortages and a potential real estate correction as factors keeping growth below its potential, according to Lebanon This Week, the economic publication of the Byblos Bank Group.

It said Lebanon's relative insulation from the global financial crisis, as well as the low base of growth and the availability of financing from the donor community will keep the economy from outright recession, while decisive election results and an improvement in the reform outlook would lead to upside risks. It forecast growth to pick up again in 2010 to 4 percent, adding that growth in Lebanon is far below its potential and that the economy could be growing much faster for a state that is recovering from long periods of stagnation and is supported by billions of dollars in aid and loans. BMI's forecast is based on an ongoing unstable political situation with very slow, if any, progress on reforms. It noted that any major progress in the political situation or in terms of reforms would likely lift the growth rate closer to the 6-7 percent mark.

In parallel, BMI ranked Lebanon in 9th place in country risk among 15 countries it rates in the Middle East and Africa region. Lebanon ranked ahead of Iran, Algeria, Egypt, Kenya, Nigeria and Zimbabwe, and came behind Saudi Arabia, Jordan, Bahrain, Israel, South Africa, Kuwait and the UAE. Its score of 54 points was below the regional average of 55.8 points. The report said Lebanon's score and ranking reflect a high to medium level of risk associated with continuity in policy direction, as well as the degree of strength and balance of the country's economy, among other factors. It added that the key rationale behind the country's score includes the instability of the government, a poor legal framework and excessive red tape.

BMI noted that economic activity indicators have shown positive trends in 2008, and pressure on the Lebanese pound is, for once, on the upside. It anticipated government spending to remain elevated, as the state will continue to spend, irrespective of the level of the deficit, in order to maintain stability.

It said export revenues have grown strongly but still account for less than a third of import costs, resulting in net exports remaining a drag, rather than a driver of growth. It expected consumer spending to remain dependent on political stability, and to improve with a sustained period of political calm. It said inflation is still a threat, adding that it should start to recede toward the end of 2008 and early 2009. -


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Lebanon Time-Line

Introducing Lebanon

Coolly combining the ancient with the ultramodern, Lebanon is one of the most captivating countries in the Middle East. From the Phoenician findings of Tyre (Sour) and Roman Baalbek's tremendous temple to Beirut's BO18 and Bernard Khoury's modern movement, the span of Lebanon's history leaves many visitors spinning. Tripoli (Trablous) is considered to have the best souk in the country and is famous for its Mamluk architecture. It's well equipped with a taste of modernity as well; Jounieh, formerly a sleepy fishing village, is a town alive with nightclubs and glitz on summer weekends.

With all of the Middle East's best bits - warm and welcoming people, mind-blowing history and considerable culture, Lebanon is also the antithesis of many people's imaginings of the Middle East: mostly mountainous with skiing to boot, it's also laid-back, liberal and fun. While Beirut is fast becoming the region's party place, Lebanon is working hard to recapture its crown as the 'Paris of the Orient'.

The rejuvenation of the Beirut Central District is one of the largest, most ambitious urban redevelopment projects ever undertaken. Travellers will find the excitement surrounding this and other developments and designs palpable - and very infectious.

Finally, Lebanon's cuisine is considered the richest of the region. From hummus to hommard (lobster), you'll dine like a king. With legendary sights, hospitality, food and nightlife, what more could a traveller want?

Introducing Beirut

What Beirut is depends entirely on where you are. If you’re gazing at the beautifully reconstructed colonial relics and mosques of central Beirut’s Downtown, the city is a triumph of rejuvenation over disaster.

If you’re in the young, vibrant neighbourhoods of Gemmayzeh or Achrafiye, Beirut is about living for the moment: partying, eating and drinking as if there’s no tomorrow. If you’re standing in the shadow of buildings still peppered with bullet holes, or walking the Green Line with an elderly resident, it’s a city of bitter memories and a dark past. If you’re with Beirut’s Armenians, Beirut is about salvation; if you’re with its handful of Jews, it’s about hiding your true identity. Here you’ll find the freest gay scene in the Arab Middle East, yet homosexuality is still illegal. If you’re in one of Beirut’s southern refugee camps, Beirut is about sorrow and displacement; other southern districts are considered a base for paramilitary operations and south Beirut is home to infamous Hezbollah secretary general, Hassan Nasrallah. For some, it’s a city of fear; for others, freedom.

Throw in maniacal drivers, air pollution from old, smoking Mercedes taxis, world-class universities, bars to rival Soho and coffee thicker than mud, political demonstrations, and swimming pools awash with more silicone than Miami. Add people so friendly you’ll swear it can’t be true, a political situation existing on a knife-edge, internationally renowned museums and gallery openings that continue in the face of explosions, assassinations and power cuts, and you’ll find that you’ve never experienced a capital city quite so alive and kicking – despite its frequent volatility.