From the Newsroom
São Paulo – The government of Lebanon approved on Monday (27) its 2019 budget that includes deep spending cuts to try and narrow the deficit to 7.6% of Gross Domestic Product (GDP) in a bid to stave off financial crisis, according to a story published at Arab News and other news websites. Last year, the deficit was 11.5% of GDP.
Lebanon’s Finance Minister Ali Hassan Khalil (pictured above) said in a news conference broadcast live on television that the budget reflects a real government will to take a corrective path in state finances. According to him, it was based on a Lebanon’s economy growth forecast of 1.2% this year.
The budget must still pass in the Lebanese parliament. Lebanon’s public debt burden, equivalent to about 150% of GDP, is one of the heaviest in the world. Last year’s deficit was equal to about 11.5 percent of GDP, and economic growth rates have been weak for years. Lebanon’s public sector is its biggest expense, followed by the cost of servicing the public debt, and subsidies to an inefficient electricity sector.
Khalil said the budget had been well received by foreign states. Last year, international donors pledged USD 11 billion in spending on Lebanese infrastructure in return for its government implementing reforms. “Reducing the deficit is an international need,” said the minister. He said that Lebanon now expected the new investment projects to start.
He said that the Finance Ministry’s efforts to keep the deficit in line with budget projections will show its seriousness. Khalil believes that the injection and launching of new investment projects in the country will have a “big impact on moving the economy.”
Translated by Guilherme Miranda