Beirut: Lebanon's economy may grow more than 5 per cent this year as money floods into the country, cutting borrowing costs and enabling the central bank to maintain investment incentives, the central bank's Vice Governor Saad Andary said.
"I am confident we are going to replicate last year's growth rate," Andary said in an interview in Beirut. "Interest rates have dropped and banks are flush with liquidity."
Lebanese banks received more than $1.5 billion (Dh5.5 billion) a month from abroad in 2009 as they kept interest rates on deposits in Lebanese pounds at about 7 per cent, while rates elsewhere in the world tumbled. The inflow of funds enabled the central bank to reduce reserve requirements on lending for housing, health-care, education, environmental projects and start-up businesses.
Growth this year will be led by real estate and tourism, after the economy expanded about 9 per cent in 2009 and 8.5 per cent in 2008, Andary said.
Finance Minister Raya Haffar Al Hassan said on December 14 that the economy grew about 7 per cent last year, an estimate echoed by the International Monetary Fund.
Credit leaped about 16 per cent in 2009 and is likely to rise by a similar amount this year, Governor Riad Salameh said in an interview on January 20.
