A version of this article appeared in the print edition of The Daily Star on October 19, 2017, on page 4.
Economic growth in Lebanon has long been associated with growth in real estate, construction and tourism. In the period 2007 – 2010, the country’s real GDP growth hovered in the range of 8% to 10% mainly on account of large local and foreign investments in real estate and construction as well as a high tourism activity. Tourist arrivals made yearly double-digit leaps and peaked at more than 2 million tourists in 2010, unemployment gradually declined from 9.2% in 2007 to 6.2% in 2010 and the construction area authorized by permits doubled from 8.4 million sqm in 2007 to 16.03 million sqm in 2008.
The tides have shifted and Lebanon’s main economic drivers have suffered from 2011 to date. Lebanon is surrounded with countries where revolts have erupted in domino-fashion as of 2011 and has since then been particularly impacted by the Syrian war. At the time of writing, the Syrian war continues to generate spillovers on the Lebanese scene, the most important of which is the influx of 1.5 million Syrian refugees. A stock of unsold units has piled up in the real estate sector on account of dry demand, and the composition of tourists drifted away from heavy spenders to tourists with limited purchasing power. Accordingly, growth has dropped to an anemic 1% in 2016, the IMF said.
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Infrastructure Investments essential overdue
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