LEBANON
Economic Outlook
A stronger real estate sector as well as a continued increase in tourist arrivals are expected to lead to a small pickup in economic activity in 2016, which nonetheless would persist to be sluggish and below potential. Lebanon’s economic prospects over the medium term are highly affected by geopolitical and security conditions, and those remain decidedly volatile. Projections assume that the Syrian war persists and that spillovers into Lebanon, while significant, remain contained. Based on this, we forecast growth over the medium term at 2.5% annually. Reaching pre-crisis rates is contingent on the resolution of the Syrian war in a manner that does not compromise the structure and stability of Lebanon, as well as on the resumption of the domestic political process.
(World Bank, Country report on Lebanon, Economic Outlook, fall 2016)
The economy continues to benefit from upbeat sentiment on the political front. Business operating conditions have improved in light of the formation of a new government, with the PMI recording the best reading in a year in January. The Central Bank’s economic coincident indicator, which is meant to emulate GDP growth in the absence of timely national account data, has outperformed its recent historical standards, growing 6.2% in annual terms in November. Nonetheless, the adoption of a new electoral law could prove a stumbling block for new elections due to be held in May. Although hopes were high that lawmakers would find a compromise between a proportional and majority parliamentary system, a recent refusal from some political forces could see the postponement of both the new law and the elections.
(Focus Economics, Lebanon Economic Outlook, 02/2016)
Background Information
The Republic of Lebanon, with its millennium old culture, around 4.2 million inhabitants and an area of approximately 10,000 square kilometers, has enormous potential for economic development. Lebanon’s strategic geographical location has been recognised for centuries as a contact point between the east and west and as the gateway to the Middle Eastern market. Home to a 1.2 million high-skilled labour force with access to a regional market of 106 million consumers, Lebanon offers plenty of advantages for potential investors planning to develop new business in the region.
Several foreign companies have chosen Lebanon as the place to set up their businesses to cater the region (Microsoft, Packard Bell, Deutsche Post, Zurich Financial Services, e. g.)
The civil war (1975-1990) and the military conflict with Israel in summer 2006 had destroyed important parts of the infrastructure and had thrown back the country in its technical development. Since 2009 public administration and infrastructure are undergoing fundamental restructering and modernization according to the internationally highest standards.
The Lebanese banking industry is financially sound and stable. It ranked fourth worldwide in 2016 in terms of soundness of bank rankings, following Canada, New Zealand, and Australia. The country is also recognized for its multi-skilled workforce and a high entrepreneurial drive among its citizens. The percentage of employed people holding university degrees is among the highest in the region at 43%.
Lebanon has also one of the lowest taxation schemes and fiscal charges in the world, with only a 15% corporate tax rate and offers one of the most liberal investment climates in the Middle East, acting non-interventionist toward private investments.
In Lebanon you can combine one of the most hospitable destination for business with a Mediterranean climate, cosmopolitan lifestyle and a variety of tourist attractions and activities across breath-taking natural landscapes. The quality of life is very high (shopping, restaurants, leisure) – the variety of culture, education possibilities and an internationally renowned health care service contribute daily to its further progress.
The New York Times considered the Lebanese capital as the top international tourist destination, the Financial Times called it a “sleepless city” and Condé Nast Traveler ranked Beirut among the first 20 world's top tourist destinations
The country´s capital Beirut is the leading cultural center of the Middle East and a market place for the exchange of ideas and information between the west and the Arabian world. A historic melting pot for multiple civilizations, a multilingual haven of culture and diversity.