“This increase in inflows demonstrates more confidence from both- Lebanese expatriates and non-Lebanese in the economy and the banking system,” said Marwan Barakat, who is the head of research unit at Audi, publisher of the report.

Capital influx, a measure of the amount of capital and money that flows into an economy from abroad, is an indicator of business confidence.

The capital inflow is calculated by adding up remittances, foreign direct investment (FDIs), and tourist spending. In light of the absence of monthly official data for the three figures, Barakat said that the report has based its calculation for the inflows on the trade balance and the Balance of Payment results.

The BOP, a calculation for all payments out of a country within a given period and all payments into the country, has recorded a high surplus for the quarter which indicates the continuous flow of capitals from abroad. The BOP surplus reached $978.1 million in Q1;this is a threefold increase from $298 in the first quarter of 2009.

The high surplus in the balance of payment was more than enough to cover the trade deficit which has widened to $4.3 billion over the quarter.

While many believe that the surge in capital inflows is a double-edged sword with inflationary impacts, Barakat confutes this opinion. “The continuous flow of capital means that investor confidence is increasing,” he said.

The rising liquidity in the market, according to Barakat is a good sign for the economy. “While many countries were and still suffering from a shortage in liquidity, we are enjoying a good money flow… this is positive, this is good for the country,” he said.

It is impossible to identify the countries of origin for the capitals with the absence of official statistics, said Barakat.