10 August 2010
BEIRUT: The Lebanese property sector is “in a league of its own” and remains exceptionally resilient to property bubbles that often plague countries with comparable booms, an economic update published Monday by emerging market specialists, Oxford Business Group (OBG), has claimed.
Some 22,000 real-estate transactions, worth $2.1 billion, were conducted in the country in the first quarter of 2010 alone, which amounts to 41 percent growth in contrast to the same period in 2009, the report quotes the directorate of real estate as saying.
The strong performance in the real-estate sector has been the main driving force of economic growth in the country, which the International Monetary Fund has projected to rise from the 6 percent originally forecast to 8 percent of GDP in 2010, ranking the country second regionally after Qatar and fourth globally.
The “excellent performance” of the banking sector – which has seen a solid growth in profits and deposit levels over the last 18 months, without jeopardizing lending levels – was also commended for Lebanon’s good performance during the global economic crisis.
According to the report, Lebanese banks made an additional $3 billion worth of loans in the first five months of 2010, bringing the figure up to some $31.4 billion, a 10 percent rise on December 2009.
“By almost any measure, the Lebanese economy looks set for a strong end to 2010, with foreign investments on the rise, the property market flourishing and the tourism sector enjoying a banner season,” the OBG report said.
As always, potential hurdles remain and “the fragile political stability of Lebanon is a perpetual concern,” the Oxford Business Group noted.
Recent suggestions that the Special Tribunal for Lebanon will implicate Hizbullah members in the 2005 assassination of former Prime Minister Rafik Hariri are of particular concern and could potentially persuade investors to “think twice” before buying into the Lebanese economy.
Regardless of the potential instability, however, economic indicators have been so good that economic growth could well be maintained in spite of political instability or even war, the Oxford Business Group report concluded.
Copyright The Daily Star 2010.
