BMI View: The increase in private healthcare fees will be welcomed by Lebanon's private providers, but not so by the general private sector, given the significant increase in the 2% contribution made by employees earning over LBP16.7mn (US$11,082) per annum. The heavily-indebted National Social Security Fund (NSSF) remains woefully inefficient and the private sector will continue to feel aggrieved about an increase in contributions to such a wasteful organisation. We also believe this sentiment could encourage high earners to leave the NSSF programme and take out insurance with a purely private insurance organisation, which would clearly have a negative impact on NSSF income. Headline Expenditure Projections ???? Pharmaceuticals: LBP1,807bn (US$1.20bn) in 2011 to LBP1,925bn (US$1.28bn) in 2012; +6.5% in local currency terms and +6.4% in US dollar terms. Forecast broadly unchanged from Q312. ???? Healthcare: LBP4,426bn (US$2.94bn) in 2011 to LBP4,741bn (US$3.15bn) in 2012; +7.1% in local currency terms and +7.0% in US dollar terms. Forecast broadly unchanged from Q312. ???? Medical Devices: LBP408.07bn (US$271mn) in 2011 to LBP451.23bn (US$299mn) in 2012; +10.6% in local currency terms and +10.4% in US dollar terms. Forecast broadly unchanged from Q312.

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