Lebanon post Paris III: macroeconomic outcomes from donor funding

Lebanon has experienced considerable economic turbulence since the onset of civil war in 1975, resulting in burgeoning fiscal deficits, and an unsustainable public debt overhang and debt servicing requirements. Considerable economic reconstruction progress was made, until a war with Israel in 2006 that devastated such progress. This paper focuses upon identifying macroeconomic outcomes for Lebanon arising from recent international donor assistance, and its usage. Focus is placed upon identifying how best to utilise the donor funds in order to achieve desired economic outcomes. Numerical simulations indicate that emphasising infrastructure expenditure is likely to be most conducive in achieving these outcomes