The breaking of political deadlock in Lebanon has given way to optimism for economic growth. The country is also banking on a key role in the eventual reconstruction of Syria.

The election of President Michel Aoun after a 29-month recess has returned Lebanon to optimism. This is likely to be reflected in growth, predicted at 2.5% for FY2017 following expansion of 1.3 and 1.5% in 2015 and 2016, respectively. Growth in recent years, in spite of the huge pressures wrought on state infrastructure by the Syrian refugee crisis—one in five is a refugee in Lebanon today—is attributable to a rejuvenation of the real estate and construction and tourism sectors, according to The World Bank. An extra shot in the arm will come from the increased consumer confidence as a result of relative political stability, as well as diplomatic efforts to smooth the country's often-tempestuous relations with its neighbors. In that regard, President Aoun made an important visit to meet with GCC leaders in order to end a sectarian dispute that had resulted in a UAE ban on its citizens traveling to Lebanon, as well as other punitive measures from members of the Gulf bloc.

SMEs remain the backbone of the Lebanese economy, accounting for 97% of enterprises in the country. Public debt is expected to increase by approximately USD4.9 billion in 2017, and gross public debt expanded by USD2.3 billion in the first quarter of the year. In 2016, the government ran a budget deficit of nearly 8.7%, an unsurprising fact considering the size of the refugee population. But despite having borne a heavy burden in recent years, Lebanon has continued to trade extensively with Syria and considers itself a key player in the eventual reconstruction of the country. Increases in trade with Syria played a large role in Lebanon's robust export figures for 1Q2017. While total Lebanese exports hit USD965.3 million for the period, representing YoY growth of 11%, sales to Syria grew an impressive 76.3% YoY, hitting USD100.1 million. The majority of these exports were composed of food products and fuel.

Construction growth in 1Q2017 proved slower than anticipated, while cement deliveries totaled 1.1 million tons in this period, and construction permits for new developments fell 3.3% to 3.2 million sqm. It is construction, however, alongside transport and logistics, which will likely benefit the most from the eventual end of conflict in Syria. In that regard, the government is putting the emphasis on Tripoli, a northern city that is taking center stage in the shift in development focus away from Beirut. By strengthening the city's port and the Tripoli Special Economic Zone, alongside the development of a northern railway, the government will effectively be cementing the role of Tripoli as a transit point for the materials that will eventually flood into Syria, all while working to better distribute wealth across the country.

That Lebanon has remained in growth despite the myriad challenges it faces in the region is, by any account, impressive. And key to Lebanon's resiliency is its banking sector, which has long displayed the admirable properties of Teflon, having withstood both internal conflict and external headwinds. This sectoral resilience, even to the rigors of civil war, has largely been ensured by consensus among all political sides that its health was vital to sustainable economic performance. Most recently, such non-partisan commitment to financial stability was confirmed in 2015 by the holding of an extraordinary parliamentary session to adopt key financial initiatives; this despite parliament not convening due to the protracted failure to select a president. And just a quick look at the figures confirms the significance; sector assets exceed 350% of GDP, while the Lebanese financial sector as a whole, as of end-2016, employed over 25,000 people at 1,078 branches, managing total assets of USD204.3 billion.

With The World Bank citing tourism as a key engine for growth in the coming years, that sector, too, is well worth a closer look. Starting in 2011 and bottoming out in 2013, Lebanon's tourism industry took a serious hit, a drop almost entirely attributable to the outbreak of war next door. As quickly as visitor numbers fell, however, they began to rise. The country's rebound began in 2014, and since 2015 numbers have grown in the double digits. In 2016, Lebanon welcomed just under 1.7 million visitors, representing an 11.23% increase from 2015. Though 2016's rise was slightly lower than 2015's YoY growth of 12%, amounting to 1.5 million arrivals, the tourism sector has seen a decidedly positive annual growth rate since the initial decline. And while a decrease in regional tourists due to the spat with the GCC took its toll, visitors from Europe and North America were, for the most part, able to mitigate the effects. In 2016, the tourism industry's direct contribution to GDP sat at USD3.3 billion, or approximately 7% of GDP. The World Travel and Tourism Council (WTTC) estimates this percentage to rise by 2.9% in 2017, bringing the total to USD3.5 billion.