Lebanon's budget deficit swelled during the first 11months of last year as debt repayments for reconstruction projects increased.
However, the country's long-standing political deadlock has helped to maintain levels of public spending and curb the national debt load as the economy charges ahead.
Figures released by the Lebanese ministry of finance show the country's deficit reached 4.27 trillion Lebanese pounds (Dh10.39 billion) in the year to November, an increase of 9.4 per cent on the same period the previous year.
Lebanon has not passed a budget since 2005 and the resulting freeze on new government spending has created a fertile environment for investors, said Dr Marwan Barakat, the chief economist at Bank Audi, a Lebanese bank.
"Since 2005-2006, what we've seen is an improvement in debt ratios [because of] the fact that the government has been spending less than otherwise. This has constrained expenditure, while public revenues have been benefiting from the growth in the country.
"This has given more positive signals to the [international] investor community," he added.
Lebanon has experienced an average real annual GDP growth rate of 8.5 per cent over the past four years.
However, Standard & Poor's, the credit rating agency, said in a report that it expected growth to stumble, falling to 6 per cent this year and 5.5 per cent next year.
The agency warned that the country's debt-to-GDP ratio was high, however, although it predicted a fallfrom an expected 133.4 per cent at present to 125.8 per cent by the end of the year.
Lebanon faces21tn pounds of maturing debt this year, according to data from Bloomberg, much of which was accumulated between the end of the civil war in 1990 and the end of the 2006 war with Israel.
"The bulk of the Lebanese debt is held by the Lebanese themselves - it's not foreign debt," Dr Barakat said. This made the country's debt much more stable, he said.
"The locals aren't waiting for the first crisis signal to get out of the country."
