Richard Dean
Reuters

DUBAI: Lebanon trimmed its 2005 economic growth forecast to 5 percent after the killing of former Prime Minister Rafik Hariri, but global investors remain committed to the country, a Finance Ministry official said on Thursday.
Alain Bifani, ministry director general, said a drop in the number of holidaymakers after the Feb. 14 bombing in Beirut that killed billionaire businessman Hariri would cut real growth in gross domestic product growth to 5 percent this year from a previously expected 5.5-6 percent.
“This is a bit of a correction. We were more likely to have 5.5 to 6 percent (before the killing),” he told Reuters on the sidelines of an investment seminar in Dubai.
The car bomb ripped through the heart of the exclusive hotel district in Beirut which was beginning to regain its allure as a holiday spot after the 1975-1990 civil war.
Bifani said it was too early to tell how soon the tourism sector would recover, but voiced confidence that the impact would be limited.
“There is a difference between blind terrorist activity and a well-planned assassination. Blind terrorism would completely discourage tourists,” Bifani said.
The attack stunned Lebanon’s business community and unnerved investors, analysts said. But the Lebanese pound has held steady and the central bank has vowed to keep it stable as well as keeping interest rates unchanged.
Bifani said global investors – ranging from wealthy Gulf Arabs to international banks – maintained confidence in Lebanon.
He said international investment banks, including J.P. Morgan Chase and Co,Credit Suisse and Barclays Plc, had confirmed their interest in a planned government debt exchange.
Bifani said the debt exchange, part of an ongoing government debt management programme, would take place “within the next two months.” “It is always difficult for subscribers to completely forget about such a tragic event, but the appetite is still there, even after the shock,” he said.
Gulf Arab central banks had confirmed their commitment to the 2002 Paris II debt restructuring agreement and private Gulf investors pledged to continue investment plans, he said.
The Lebanese business community saw Hariri as the debt-laden country’s only hope for economic revival after the civil war.