Lebanon has a free-market economy and a strong laissez-faire commercial tradition. The Lebanese economy is service-oriented; main growth sectors include banking and tourism. According to the Lebanese Ministry of Economy and Trade, Lebanon posted 5% real growth in 2004, with inflation running at 3%. There are no restrictions on foreign exchange or capital movement, and bank secrecy is strictly enforced. Lebanon has adopted a law to combat money laundering. There are practically no restrictions on foreign investment.
The government also has maintained a firm commitment to the Lebanese pound, which has been pegged to the dollar since September 1999. The government passed an Investment Development Law as well as laws for the privatization of the telecom and the electricity sector, signed the Euro-Med Partnership Agreement with the European Union (EU) in March 2003, and is working toward accession to the World Trade Organization (WTO). In order to increase revenues, the government introduced a 10% value added tax (VAT) that became applicable in February 2002 and a 5% tax that became applicable in February 2003.
Plagued by mounting indebtedness, Lebanon submitted a comprehensive program on its financing needs at the Paris II donors conference in November 2002 and succeeded in attracting pledges totaling $4.4 billion, including $3.1 billion to support fiscal adjustment and $1.2 billion to support economic development projects.
Lebanon has many investment-enabling strengths that have encouraged foreign companies to set up offices in recent years. These strengths include a free market, a strong laissez-faire commercial tradition, a highly dollarized economy, free movement of capital and foreign exchange, strict bank secrecy, a highly educated labor force, a good quality of life and limited restrictions on investors.
Real GDP growth is estimated at three percent in 2007, according to the Central Bank of Lebanon. Nominal GDP is estimated at about $24.6 billion in 2007, with inflation estimated at five percent. GDP per capita is estimated at approximately $6,560. The Central Administration of Statistics estimates Lebanon's population in 2004 at 3.75 million, excluding Palestinians in the camps and seasonal workers. This figure has been adopted by the IMF and local banking sources for 2007.
According to Lebanese Customs statistics, during the first nine months of 2007, Lebanon’s total imports reached $11.4 billion and total exports reached $2.6 billion. The largest source of imports are Italy, China, USA, France and Germany.