Lebanon has high hopes of the trend continuing. The ambitious budget for 2002 projects a deficit of 40 per cent, compared with the 51 per cent target for this year. While figures for the first 11 months of 2001 show restraint in spending, anticipated revenues from the sale of local GSM operating licences have yet to materialise, and it remains to be seen whether receipts from value-added tax, which will be introduced in February, will enable the government to meet its budgetary targets for 2002.

Debt servicing is the largest drain on government expenditure, at $2,130 million in the first 11 months. Public debt now stands at about $27,000 million, representing more than 165 per cent of Lebanon’s gross domestic product. The IMF has warned that devaluation may be one of the few solutions left for relieving the country’s mounting fiscal difficulties.