Growth to regain traction from 2013

World Bank: Lebanon’s economy feeling the pinch of the conflict next door

“Economic spillovers from Syria to Lebanon are beginning to look serious as Lebanon’s service-based economy is starting to feel the effects of the conflict next door,” the World Bank said in a report published on Tuesday (June 12). However, it indicated that Lebanon is still “registering firm growth on industrial output gains.”

The World Bank expects growth to soften during 2012, but indicated that recovery will gain traction from next year. Lebanon’s GDP is forecast to grow closer to five percent over the 2013–2014 period, with higher remittances, tourism activity, and foreign direct investment (FDI).

Worker remittances retained a positive flow in 2010 and 2011 estimated at $15 billion.

The World Bank highlighted that economic progress in Lebanon, as well as other MENA countries, is firmly tied to the overall political climate. The baseline assumes a normalization of conditions from 2012 to 2014, however if such easing of tensions is delayed, growth in these countries could be significantly slower.

Reported by Hanadi Chami