VZCZCXRO8208
RR RUEHBC RUEHDE RUEHDH RUEHKUK RUEHROV
DE RUEHLB #1118 2860721
ZNR UUUUU ZZH
R 130721Z OCT 09
FM AMEMBASSY BEIRUT
TO RUEHC/SECSTATE WASHDC 5873
INFO RUEHEE/ARAB LEAGUE COLLECTIVE
RHEHAAA/NSC WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RUCPDOC/USDOC WASHDC

UNCLAS BEIRUT 001118 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ECON EFIN KFLU PGOV LE
SUBJECT: IMF PROPOSES INCLUDING REMITTANCES IN GDP CALCULATIONS 
(ECONOMIC WEEK IN REVIEW, OCTOBER 5 - 11, 2009) 
 
CONTENTS 
-------- 
 
-- IMF PROPOSES INCLUDING REMITTANCES IN GDP CALCULATIONS 
-- CENTRAL BANK GOVERNOR: BANK DEPOSITS REACH $92 BILLION 
-- LEBANON RECORDS BEST IMPROVEMENT IN COUNTRY RISK WORLDWIDE 
-- SWINE FLU VACCINES TO BE AVAILABLE SOON 
 
IMF PROPOSES INCLUDING 
REMITTANCES IN GDP CALCULATIONS 
------------------------------- 
 
¶1. (U) An IMF working paper has suggested adding remittances to 
Lebanese GDP as a way to create a more accurate representation of 
debt sustainability.  With gross remittance inflows to Lebanon 
estimated at around 20% percent of GDP in 2008 (making the country 
one of the largest recipients of remittances as a share of GDP 
worldwide), adding remittances would drop the public debt to GDP 
ratio.  Lebanon's gross public debt reached $47.8 billion at the end 
of June 2009.  Meanwhile, Central Bank of Lebanon (CBL) Governor 
Riad Salameh recently estimated GDP at $33 billion, and noted that 
if remittances are added, GDP would reach $38 billion. 
 
CENTRAL BANK GOVERNOR: BANK 
DEPOSITS REACH $92 BILLION 
--------------------------- 
 
¶2. (U) Central Bank of Lebanon (CBL) Governor Riad Salameh publicly 
noted that commercial banks have been able to absorb around $14 
billion in deposits in the first eight months of 2009.  With this, 
deposits stand at $92 billion and $22 billion in Lebanese banks 
operating overseas, he said.  Salameh expected interest rates on 
Lebanese pound deposits and treasury bills either to fall or remain 
stable, and noted that Lebanon will not have any problem refinancing 
the public debt in 2009-2010 thanks to high liquidity in the market. 
 
 
¶3. (U) Last month, prominent local economists publicly characterized 
increased deposits as a double-edged sword for local banks.  As 
depositors continue to convert dollar deposits to Lebanese pounds to 
benefit from higher pound interest rates, bank profits will likely 
take a hit in 2009, while new investment opportunities are harder to 
find in the aftermath of the global economic crisis. 
 
LEBANON RECORDS BEST IMPROVEMENT 
IN COUNTRY RISK WORLDWIDE 
-------------------------------- 
 
¶4. (U) Lebanon ranked 80th out of 186 countries worldwide in 
Euromoney magazine's semi-annual country risk survey, up 22 places 
from the previous survey in March.  On a year-to-year basis, 
Lebanon's rank rose by 54 spots, making Lebanon's improvement the 
best worldwide in the past year.  The survey attributed the 
improvement to the country's resilience to the economic crisis. 
 
¶5. (U) The survey assesses country risk using nine categories: 
political risk, economic performance, debt indicators, debt in 
default, credit ratings, access to bank finance, access to 
short-term finance, access to capital markets, and discount on 
forfeiting.  Lebanon's score rose in six categories and remained 
unchanged in terms of debt indicators, debt in default, and access 
to bank finance. 
 
SWINE FLU VACCINES 
TO BE AVAILABLE SOON 
-------------------- 
 
¶6. (U) Minister of Public Health Mohammad Khalifeh publicly noted 
that swine flu vaccines will be available next month.  The GOL will 
not make the vaccination compulsory, as long as the cases are not 
life-threatening, he said.  With the start of the school year, the 
Ministry of Public Health (MOPH), in collaboration with the Ministry 
of Education, has launched an extensive awareness campaign on how to 
handle the flu.  In early September, the MOPH announced it will no 
longer track the number of people diagnosed with the flu, following 
the lead of other countries worldwide. 
 
SISON