Recent Economic Developments, 117

09/05/2007
All Press Releases In Subject:
The Economy and Economic Activity

Recent Economic Developments, 117

Overview:

In the period reviewed––the last quarter of 2006 and the first quarter of 2007––the expansion of real economic activity persisted, and all the macroeconomic fundamentals improved. The forces that led to the positive economic turnaround in the second half of 2003, including the calm security situation and the rise in world demand, reappeared in the period reviewed and resulted in the continuation of the growth trend evident in the last few years. The positive National Accounts data of the last quarter of 2006 and the latest indicators of the first quarter of 2007 show that following the Second Lebanon War1 the economy is returning to the path of rapid growth: GDP rose in 2006: Q4 at an annual rate of 7.3 percent,2 with a 10.2 percent surge in business sector product, compared with a drop in the previous quarter. These figures also reflect the element of compensating for the reductions in Q3 caused by the war. The growth in services accelerated in the period reviewed, and the recovery in the construction industry continued. The composite state-of-the-economy index, which combines the current indicators, continued to rise at the fast pace evident since the recovery from the recession. Another positive indicator is the persistent fast rise in tax revenues.

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