Macroeconomic Forecast Lebanon

We see the budget deficit as having peaked (at 13.3% of GDP) in 2006, on the back of the heavy spending and revenue crisis in the wake of the Israeli war with Hizbullah, and the shortfall should continue to contract, dropping to 6.8% of GDP in 2008. Nonetheless, it will widen gradually thereafter, as foreign aid from the Paris III conference dries up, and the need for generous spending persists.

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