In its latest “Lebanon Country Outlook Report”, EIU said that the growth rates projected which are “notable” stem from the country’s economic performance in 2009.
 

The research firm said that the growth rates forecasted in 2010 and 2011 will be spurred by the expected pick-up in regional growth, which will ,in line, boost investments and tourism spending.
 

The forecasted real GDP growth rates in 2010 and 2011 also compare well with the 3.1% annual average growth rate between 1998 and 2007, the last year for which actual data are available, EIU said.It also indicated that the forecasts could be improved, especially if the political scene continues to demonstrate stability.
 

EIU said that expects inflation to grow on an average of three percent in 2010 driven by an expected rise in prices of commodities which will be spurred by a rebound in global prices. However, the expected drop in prices of commodities in 2011, will bring the inflation rate down slightly to 2.9 percent in the stated year.
 

EIU said it projects the trade deficit to widen in 2010 and 2011 as the rise in the import bill will offset the rise in export earnings, especially in 2010 when oil prices are forecast to rebound strongly.
 

Also according to EIU, the country will continue to face a large, structural current-account deficit in the next two years despite the drop in the account deficit to 10 percent of GDP in 2009 from 10.5 percent of GDP in 2008.
 

However, EIU expects the account deficit to contract to 8.7% of GDP in 2011, fuelled by the growth in tourism cash flows and remittances from expatriates working abroad. The account deficit includes the trade deficit, the net balance in services, and the net income on overseas investments and net transfers.
 

EIU said that the formation of a new cabinet would trigger some progress in policy making. However, the research firm said  it expects further delays in the disbursement of the conditional aid pledged at the “Paris III” conference due to the lack of progress in fiscal reforms sought by donors, in addition to global liquidity constraints.