Lebanon » Outlook

International Property Brokers expect world growth (measured using purchasing power parity exchange rates) to increase slightly to 5.4% in 2006, before declining to 4.8% in 2007.

The Lebanese economy, which barely grew in 2005, as the turbulent political environment sapped confidence, had shown initial signs of recovery in the first half of 2006, largely on the back of strong inflows from the pool of liquidity in the oil-rich Gulf. Now, however, the Israeli blockade and attacks on Lebanese infrastructure have led to a radical revision of our forecast, given the damage and dampening impact on consumption and investment.

 We therefore forecast a contraction in real GDP of around 10% in 2006. Demand is projected to recover in 2007, as the reconstruction process gets underway, leading to overall growth of up to 8%.