In its latest report on investment opportunities in the MENA region, the investment bank EFG Hermes has projected a 3% economic growth for Lebanon in 2012 against 2.5% last year. Investment opportunities in Lebanon remained similar to other markets in the region, like Egypt, Abu Dhabi, Dubai, Jordan and Morocco. The study noted that although the country remains one of the cheapest markets in the region and has a solid banking system, political instability has started to affect stock prices in the local market.
Moreover, the escalation of violence in Syria and geopolitical developments seem unlikely to find a solution, thus affecting the Lebanese tourism and trade sectors, the report said.
EFG Hermes predicted an increase in public spending prospects after government approval of the decree concerning the adjustment of wages in December. It has estimated a 9.6% increase in public spending in Lebanon in 2012.
According to the investment bank, inflation would reach 4.9% on average, down from 5.5% recorded last year.
Regarding the external sector, the bank expects the trade deficit to widen slightly to $ 22 billion at the end of 2012, while the current account balance would reach 6.3% . (source: www.yallafinance.com )