Economic trends
Lebanon has a free-market economy with a strong laissez-faire (hands-off) commercial tradition. Following a drawn out civil war (1975-1990), Lebanon started to rebuild the country’s physical and social infrastructures by a massive reconstruction program in 1992. The government is continuing these structural reforms. The GDP growth rate in 2006 was 0%, due to the Israeli invasion and aerial attacks. It was at 2% in 2007 and is expected to be at 3.5% in 2008, according to predictions. The main challenge facing the government is the reduction of the country's debt, which amounts to 185% of the GDP. Unemployment is officially estimated at 18% but in the absence of reliable statistics, it could be as high as 20-25%. Inflation was estimated at around 3.5% in 2007.
Main branches of industry
The agricultural sector contributes nearly 7% to the GDP and employs around 15% of the active population. The main crops are cereals (mainly wheat and barley), fruits & vegetables, olives, grapes, and tobacco. Also significant is the raising of sheep and goats. Mineral resources are limited and are only exploited for domestic consumption.
The manufacturing sector accounts for 21% of the GDP. The main industrial activity is construction and civil engineering, but other activities such as jewellery making and food-processing are also well developed. The Lebanese economy is highly service-oriented. The primary growth sectors are financial and tourism. The tourism sector accounts for approximately 72% of the GDP and is going through a strong growth phase as a result of the huge investments that have been made. The Information Technology sector is developing.
International trade
Lebanon has strengthened its openness to international trade by signing an Association Agreement with the EU, by working toward accession to the WTO, and by signing a free-trade agreement with the Gulf Cooperation Council (GCC) in May 2004. The current share of foreign trade in the country’s GDP is around 65%. Its three main export partners are Iraq, Switzerland, and Syria. The commodities mainly exported are pearls & precious stones, electric & electronic equipment, iron & steel, salt, sulphur and machinery. Its three main import partners are Italy, France and Germany. Lebanon mainly imports mineral fuels, oil, vehicles, machinery, pearls & precious stones, electric and electronic equipment.
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