All Signs Point To Slowdown

The outlook for Lebanon's economy over the coming quarters has become decidedly less optimistic since the start of 2011. Although we had previously highlighted how external headwinds threatened to derail growth momentum, even we were caught slightly off guard regarding the extent to which the regional and global environment would weigh on economic activity. As a result, we now project real GDP to expand by 3.3% this year, following an estimated 8.2% in 2010. While by no means a worst-case scenario given the extent of regional unrest concomitant with the 'Arab Spring', at the moment there is little to suggest that growth momentum will be able to remain within its long-term trend average around 6.0%.

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