2013-10-18 15:59:36 - Recently published research from Business Monitor International, "Lebanon and Syria Business Forecast Report Q4 2013", is now available at Fast Market Research
BMI Ratings - Brief Methodology
The composite rating is an unweighted geometric mean of the short-term political and short-term economy ratings, allowing a ranking of all countries in BMI's emerging markets universe.
The political ratings are an indicator of political stability, seen as a pre-requisite for a stable economy and business environment. The long-term political rating considers more structural elements such as: Is there a functioning democracy? Are there free and fair elections? Is there separation between party and state? Have recent governments pursued similar, enlightened policies amid a stable political environment? The short-term political rating considers more transient influences such as: Have there been recent large-scale demonstrations or strikes? To what extent have these threatened the political status quo?
Is unemployment currently a potential source of political instability? What is the current position in the political cycle - to what extent is this contributing to political risk? Is the government having trouble passing legislation?
Full Report Details at
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The economy ratings assess the degree to which the country approximates the ideal of non-inflationary growth with contained fiscal and external deficits and manageable debt ratios. The ratings use as raw material historical data and forecasts fed in from BMI's country databases: as historical data are revised and forecasts change, so the ratings change. Factors in the long-term rating include GDP growth, unemployment, inflation, real interest rates, exchange rates, the fiscal balance, the current account balance and external debt. A number of other structural factors are also thrown into the equation, including dependence on the primary sector, reliance on commodity imports, reliance on a single export sector and central bank independence. The factors included in the short-term rating are a subset of those in the long-term rating.
Business Environment Rating
The business environment rating is a broad indicator of the investment climate, for both domestic and foreign players. While areas such as competitiveness, finance, openness and environment comprise the bulk of the rating, there is also an important feed from the political and economy ratings. The factors considered include: the state of the national infrastructure, the education system, cronyism/ corruption, red tape, the legal framework, property rights, market access and the corporate tax regime.
Partial Table of Contents:
BMI Risk Ratings
BMI Risk Ratings - Lebanon
BMI Risk Ratings - Syria
Middle East - Ratings League Tables
Executive Summary - Lebanon
Major Forecast Changes
Key Risks To Outlook
Chapter 1.1: Political Outlook - Lebanon
Sectarian Tensions Flaring Up
- Sectarian tensions will continue to increase in Lebanon over the coming quarters, mainly as a result of the ongoing civil war in neighbouring Syria. This will ensure that the political process remains slow, while the army will find it increasingly difficult to maintain security. Political instability will result in a significant deterioration of the country's macroeconomic outlook.
Long-Term Political Outlook
Political Upheaval Inevitable In The Long Term?
- Political stability will remain hard to come by in Lebanon over the coming decade. The ongoing civil war in Syria is deepening sectarian tensions, while another military conflict with Israel could trigger institutional change.
Chapter 1.2: Economic Outlook - Lebanon
In A Soft Patch
- We project real GDP growth in Lebanon of 1.4% in 2013 and 3.2% in 2014. Elevated political instability stemming from the ongoing political crisis in Syria will hamper growth over the coming quarters, with exports and fixed investment set to be particularly hard hit.
TABLE: LEBANON - ECONOMIC ACTIVITY
TABLE: LEBANON - MONETARY POLICY
Inflation Declining In Q413
- We project headline consumer price inflation in Lebanon averaging 3.5% and 5.0% in 2013 and 2014, respectively. Modest food and housing prices will maintain the headline print relatively low, while slow economic growth will partially offset the positive effects of expansionary monetary policy on consumer spending. That said, risks to the outlook are lying to the upside, and monetary authorities will find it difficult to curb an eventual spike in prices.
Chapter 1.3: 10-Year Forecast - Lebanon
The Lebanese Economy To 2022
Long-Term Growth Depends On Structural Reforms
- Lebanon's economy will face a host of structural challenges in attempting to meet its long-term growth potential, with a massive infrastructure deficit, elevated public debt load and ongoing political risks weighing on our outlook through 2022. That said, a robust banking sector, significant potential to develop the tourism industry and increased investor interest from the Gulf Cooperation Council should all help support growth. Real GDP growth is projected to expand by an average 4.0% between 2013 and 2022, with GDP per capita forecast to hit US$22,482 by the end of our forecast period.
TABLE: LEBANON LONG-TERM MACROECONOMIC FORECASTS
Chapter 1.4: Business Environment - Lebanon
Executive Summary - Syria
Major Forecast Changes
Key Risks To Outlook
Chapter 2.1: Political Outlook - Syria
Long Term Political Outlook
Conflict Scenarios Point To Turbulent Decade Ahead
- Syrian President Bashar al-Assad and his regime are fighting for their survival, but regardless of whether it endures or is overthrown, Syria is likely to remain highly unstable for many years to come.
Full Table of Contents is available at:
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Business Monitor International (BMI) offers a comprehensive range of products and services designed to help senior executives, analysts and researchers assess and better manage operating risks, and exploit business opportunities, across 175 markets. BMI offers three main areas of expertise: Country Risk BMI's country risk and macroeconomic forecast portfolio includes weekly financial market reports, monthly regional Monitors, and in-depth quarterly Business Forecast Reports. Industry Analysis BMI covers a total of 17 industry verticals through a portfolio of services, including in-depth quarterly Country Forecast Reports. View more research from Business Monitor International at www.fastmr.com/catalog/publishers.aspx?pubid=1010
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