BEIRUT: The World Bank revised Lebanon’s real GDP growth for last year downward from 2.8 percent to 1.7 percent.
According to the World Bank’s Global Economic Prospects, Lebanon’s growth projection had already been cut to 2.8 percent from the 4.5 percent forecast seen in the June 2012 edition.
Central Bank Governor Riad Salameh last month projected Lebanon’s GDP growth in 2012 would reach 2 percent, adding that this growth in 2013 could be higher depending on political stability in the country and the outcome of the turmoil in Syria.
The World Bank attributed the country’s economic slowdown to the spillover effects from the situation in Syria, causing growth to drop from 3 percent in 2011 to 1.7 percent in 2012, compared to an average of 3.8 percent for the MENA region.
Lebanon’s GDP growth forecast for 2013, at 2.8 percent, is slightly weaker than the average growth of the MENA region which is anticipated at 3.4 percent. Nevertheless, Lebanon’s growth is forecast to rise gradually, to around 4 percent by 2015, the report said.
In parallel, the World Bank’s report indicated that Syria’s unrest had an inflationary effect on Lebanon, in part due to an increase in rental prices for residential properties from Syrians fleeing the conflict. Also, foreign direct investment inflows remained more or less subdued in 2012 due to such a cloudy environment.
The World Bank’s forecasts regarding Lebanon’s current account showed that the deficit is set to tighten from 20.1 percent of GDP in 2012 to 19.4 percent of GDP in 2013.
In parallel, the current account balance of the MENA region reported a surplus of 1.0 percent of GDP in 2012, anticipated to tighten to 0.6 percent of GDP in 2013.
Real GDP growth for the MENA region in 2012 recovered to 3.8 percent, a rate above the 2010 level of 2.8 percent and the 2.4 percent level seen in 2011. The report said the rebound had largely been driven by a recovery in oil exporter Libya and continued robust expansion in Iraq.
Regional GDP growth is projected to slow to 3.4 percent in 2013 as growth in Libya returns to a more sustainable pace; and then to rise to 3.9 percent in 2014 and 4.3 percent in 2015.