The economic impact of the new government
| After five long months of negotiation, the different political Lebanese party finally found an agreement for the formation of a government of national unity. The different economic agencies see differently the impact of the new government on the Lebanese economy. |
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The Standard Chartered bank analysis, published in “Lebanon this week”, explains that the election of the new ministers could stabilize the political situation, and strengthen the economy. The bank Byblos publication sees the political stability imminent for economic development. It says that “domestic consumption, confidence in the banking sector, investments by overseas Lebanese and tourism are the largest contributors to GDP”. Another study confirms the analysis by adding that a national unity government is very productive. The report established by Merrill Lynch, and quoted within (by) the “Weekly monitor” of bank Audi explains that even though the new government will not reduce political tensions, nor put painful reforms such as the increase of VAT on the table, it suspects nevertheless, that political stability, the progress in the reforms and privatization, followed by the actual macroeconomic performance and the productive sector would lead the way to an improvement. The study shows that these changes would “pave the way for a sovereign rating upgrade” and remind that following the big waves of stabilization such as the Doha 2008 agreement, the economic indicators, the domestic consumption, and statistics on tourism have reached records. The study concludes that the new government maneuvers are limited and the access to international resources are conditioned by the application of reforms such as in the Telecom and Energy sector.
Beyrouth
18-11-2009
Karl Soued
Ebizproduction
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