Riad Salameh's forecast for real economic growth, which was above a previous IMF forecast of 3 percent, signalled the economy's improvement since a Qatari-mediated deal ended a political crisis in May.

The Doha agreement, which defused Lebanon's worst internal conflict since the 1975-90 civil war, led to the election of a new president and a new national unity government. But lingering disputes held up the formation of the cabinet until July 11 and agreement on its policy statement until last week.

"The markets are optimistic as to the future," Salameh said in an interview at his Beirut office. "They have not been under the influence of the difficult political moments we have gone through," he said.

"The timing of this agreement (Doha) was advantageous because Lebanon does profit from the summer season and our expectations now are that real growth in Lebanon should be around 5 percent for this year," Salameh said.

Inflation for the year to June was 13 percent, compared to a previously stated rate of 10 percent in the year to March. The increase has been driven by the higher costs of imported food and fuel.

Policies designed to keep inflation in check included keeping the discount rate steady at 12 percent, Salameh said.

"We are going to keep it stable," Salameh said, in reference to the rate.

"We have issued certificates of deposits to mop up the excess liquidity in Lebanese pounds," he said.

"The central bank still has the ability to decrease the liquidity in the market through more issuances of CDs. But for the time being, there are no specific measures that we intend to do," Salameh said.

"We have also taken an important step to limit the credit on real estate projects", he said, adding that the move aimed to keep a real estate boom "in check and not to create bubbles". -Reuters