March 29, 2017

Cabinet approves budget and sends it to Parliament, details to be unveiled on Thursday

The Cabinet has approved the draft budget for 2017, which will substantially reduce the deficit. It will now move to Parliament for further deliberations and eventual ratification.

The government has been operating without a public budget for 12 years. Successive draft plans sent by the Cabinet have lingered in an often gridlocked Parliament. The last one ratified by Parliament was in 2005.

The fiscal deficit widened to $4.94 billion in 2016.

The budget is heavily weighed down by public salaries, debt service, and transfers to Electricité du Liban (EDL). The debt service is expected to increase further as the public debt continues to grow, reaching nearly $75 billion or one and half times the country’s GDP. The global hike in interest rates would possibly contribute to the escalation of the debt service cost.

The government also plans a pay rise for public sector employees which will most likely be financed through new taxes. Parliament has approved new taxes amid protests in the streets and plans to endorse additional ones.

Source:

http://www.businessnews.com.lb/cms/Story/StoryDetails.aspx?ItemID=5979

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