Middle East Business and Economic Review

As soon as you step foot in Lebanon you feel immediately at home. Smiling faces and welcoming words make any visitor more curious to explore this rather special small country.

However, behind this warm welcome is a deeply ingrained sense of anxiety about the current situation and the uncertain future of this country, as expressed by many encountered by the Middle East Business and Economic Review team on a recent visit to Beirut.

Lebanon conceded the economic blow from the nearby instability and intramural excesses that followed. Growth, undermined since the beginning of the conflict in Syria, may not exceed 2% this year against 9% in 2009 according to the International Monetary Fund, while the fiscal deficit widened by 60% to the end of September 2013 to reach US$ 3.3 billion, one of the worst blunders for several years. This will probably have a negative impact on the debt situation, which now rises to over US$ 62 billion – one of the highest in the world in terms of ratio to GDP.

And according to the same report published by Bank Audi (find it uploaded on Middle East Business Online Channels), a continuing economic slowdown is being reported within the context of the adverse spillover effects of the Syrian conflict on investment, tourism and foreign trade. Real GDP has displayed a low – though positive – growth for the third consecutive year, estimated at between 1.5% and 2.5% by the IMF and the Central Bank of Lebanon, amidst continuing regional tensions and lingering domestic uncertainties.