Exports boost Lebanese economy

The Lebanese economy has grown by 2% in the first quarter of 2003, buoyed by a healthy growth in exports and a rise in public spending.

    The impact of the Iraq war has been minimal

    According to a report released on Wednesday by Audi Bank, Lebanon saw

     a 57% rise in exports and an eight per cent

     increase in public spending during the first quarter

    compared with the same period in 2002.


    "The impact of the war against Iraq on domestic economic

    conditions was relatively mild and short lived, while the general

    environment continued to benefit from the support of the

    international community to Lebanon and the government structural

    adjustment efforts," said Audi.

    Lebanon's strong export performance was matched by a 4.2%

    drop in imports, resulting in a 4.8% drop in the trade

    deficit from a year earlier.

    The country's import-to-export coverage ratio during the first

    quarter stood at 21%, a post-war record high, according to


    Lebanon has a large public debt

    Positive trend

    Helping the country's finances was a capital inflow of $3.5

    billion, the bulk of which were funds pledged to Lebanon

    aimed at

    helping the country restructure its heavy debt load.

    Lebanon's public debt is estimated at 180% of its $18

    billion gross domestic product.

    A decrease in the country's debt service rate and the

    government's fiscal adjustment policy helped public finances,

    according to Audi.

    But the picture was "less shiny" on the level of private demand

    with private investment dropping 13% from a year


    Audi said Lebanese bond and equity markets were helped by

    international ratings agency Standard and Poor's changing it's

    outlook on Lebanon from "stable" to "positive".

    The bank forecast the positive trend in Lebanon's trade

    balance and balance of payments should continue throughout 2003.



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