When the fighting is over, the Lebanese like to let the good times roll. Following last month’s street battles, downtown Beirut has reopened after 18 months of confrontation, seeing celebrations which resembled a street carnival. And 10 days ago, the Buddha Bar night club in the city centre, a symbol of Lebanese excess that had closed during the protests, was relaunched, signalling that Beirut is once again open for business.

Many in Lebanon like to boast that the country always comes roaring back from its periods of instability. And indeed, the crucial tourism and real estate sectors are expecting a post-conflict boom, if all goes well and money and visitors pour into the country over the summer months.

But some warn that Lebanon is now headed even more rapidly for a price crunch as inflation mounts and outside money flows in.

Real estate prices in Beirut jumped between 15 and 20 per cent in the weeks immediately following the Doha agreement in May, according to Raja Makarem, a real estate consultant. The accord ended more than a week of fighting between supporters of the western-backed government and the Hizbollah movement and its allies, and pointed a way out of 18 months of political deadlock.

Prices have reached some $3,000 per square metre in Beirut and some agents are asking as much as $4,000, even outside the much more expensive downtown area.

And tourism, which can contribute between 9 and 12 per cent to gross domestic product, is expected to prosper this year. The country may receive more than 1.3m visitors, up from just more than 1m last year, says Joseph Sarkis, the tourism minister. Airlines are reporting a run on tickets and hotels say reservations are piling up for the summer months.

Much depends now on a stabilisation of the still-precarious security situation and the formation of a government of national unity, which has been entrusted to Fouad Siniora, the previous prime minister.

After the initial euphoria of the deal in Doha, both the security and the political situations have deteriorated once more. Mr Siniora is encountering serious obstacles in the formation of a new government, centring mostly on the division of cabinet portfolios. Analysts and politicians now fear that the formation of the cabinet could become a tense, drawn-out affair.

More worryingly, low-level violence has continued uninterruptedly since the Doha accords, escalating occasionally into serious combat. Last weekend at least nine people were killed in clashes between different factions in the northern port city of Tripoli. And in the eastern Bekaa valley, at least four people have died in intermittent outbreaks of fighting.

But even if all goes well, the optimistic trends in both real estate and tourism mask a more complex truth. Large-scale investors, who virtually stopped launching new projects in the country after the war with Israel in 2006, have so far not returned.

Mr Makarem, a real estate consultant in Beirut, notes that money from the Gulf and other Arab countries is coming in the form of small-scale private purchases, not large developments. “It will take time before Lebanon can attract big Arab investors again.”

The only exception is the country’s small stock market, dominated by the real estate and banking sectors. Foreign investors seem to be confident that the market offers good value.

Mr Sarkis acknowledges that it will take years of calm and stability for the tourism sector to take full advantage of the opportunities that the country has to offer.

“We don’t have industry that can compete and we don’t have agriculture. We have services,” he says.

Much of the activity in tourism and real estate is the result of one of the less favourable developments in recent years: a massive outflow of human capital from the country. Many Lebanese head for jobs abroad, especially in the Gulf countries.

In crisis years, such as 2006 and 2007, expatriates have returned on family visits and have even continued to buy real estate. But much more important for the national economy is the money they send back in remittances, now estimated at $7bn annually.

While this allows some families to survive, those who do not have relatives abroad or who are not directly employed in the real estate or tourism sectors may experience worsening economic conditions. Concerns about rising prices, food, fuel and, in the real estate sector, making rents and housing unaffordable, are almost unanimous.

“We are facing a price explosion,” says Charberl Nahas, an economist. For most wage-earners, this will not be offset by the two-thirds increase in the minimum salary voted through by the outgoing government last month, he says.

To help revive the economy, the government must act on a series of reforms that have not been implemented during the political impasse. The energy sector needs to be restructured and the telecommunications sector privatised, say economists. But the prospects of that happening ahead of general elections in May or June next year appear mixed at best.