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Lebanon Economic Structure

By: EconomyWatch Content Date: 29 March 2010

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Lebanon economic structure is reliant on tourism and its financial sector. In fact, these two sectors can save the economy from suffering the throes of recession with regulations that made the sectors immune to the political instability that Lebanon faces the most. Helped with such regulations, Lebanon economic structure features a highly liquid financial sector and a flourishing tourism industry that, when combined, are the biggest contributors to the GDP as well as the employment scenario.

Lebanon economic structure is reliant on tourism and its financial sector. In fact, these two sectors can save the economy from suffering the throes of recession with regulations that made the sectors immune to the political instability that Lebanon faces the most. Helped with such regulations, Lebanon economic structure features a highly liquid financial sector and a flourishing tourism industry that, when combined, are the biggest contributors to the GDP as well as the employment scenario.

Lebanon Economic Structure: Primary Sector

Agriculture is concentrated in to the Beqaa valley and the valleys near the seas. While tobacco and fig are grown in south, bananas and citrus fruits are cultivated around the coastal areas. The sector contributes 5.1% to the GDP and employs as much as 12% of the workforce. The major crops produced are:

Citrus fruits
Grapes
Tomatoes
Apples
Vegetables
Potatoes
Olives
Tobacco

Agriculture has never been fully exploited in Lebanon due to its vulnerability to war and civil strif.

Lebanon Economic Structure: Secondary Sector

Lebanon industry sector is another huge source of national GDP with a contribution of 18.7% and indicates absorption of 26% of the work force. The most developed industry is manufacturing. However, the major challenges facing Lebanon on its way to industrial growth are its strict policies and political instabilities. The mining industry provides self sufficiency volumes.

Other industries are:

Food processing
Wine
Jewelry
Cement
Textiles
Mineral and chemical products
Wood and furniture products
Oil refining
Metal fabricating

Lebanon Economic Structure: Tertiary Sector

The service sector, backed by tourism and the financial sector, contribute almost 76.2% to the national GDP. This includes remittances from expatriates as well. The service sector employs almost 65% of the workforce. Many hotels and upscale restaurants have come up to enhance the tourism experience in Lebanon. This sector is sure to pick up more growth once the country moves towards political stability. Advertising is a hugely ‘in-demand’ sector and is comparable to places such as Dubai.

Lebanon Economic Structure and The Future

Inflation for Lebanon has been rising as it has in many countries, which represents some economic risk. In year 2010 inflation was 4.975 % . This makes Lebanon No. 71 in world rankings for inflation rates.. In 2009, Lebanese inflation was 1.21% .

GDP Growth (Constant Prices, National Currency) for Lebanon in year 2010 is 8 % and expected to maintain that pace in 2011. This represents some moderation thanks to inflation, particularly in energy and food prices, but still with robust growth. Prospects are fragile as ever, however, with heightened tensions internally (with the recent government collapse) and externally, particularly between Hezbollah and Israel.