Lebanon Cabinet Approves First Budget Since 2005 – Bloomberg
Lebanon’s cabinet approved the 2017 state budget, paving the way for a possible breakthrough in the decade-long impasse over the country’s finances.
The spending plan, approved late Monday, now goes for a vote in parliament, which hasn’t passed a budget since 2005. The budget deficit is forecast at $5.2 billion, or 9.54% of gross domestic product, on spending of $15.8 billion, according to the draft released last year.
Lebanon’s spending plan has been hostage to political divisions that only deepened after violence broke out in neighboring Syria six years ago. While cabinet approved a budget in 2012, lawmakers never approved it. Political standoffs eased in October after Michel Aoun was elected president, filling a post that had been vacant for more than two years and allowing progress on the budget front.
The economy has suffered within that budgetary vacuum, as the war in Syria battered the Lebanese economy. More than 1.5 million refugees have fled into its borders, its only overland trade route has been closed and tourism has suffered. The absence of a budget has also led to unauthorized government spending and corruption accusations.
Cabinet’s approval of the budget is “another achievement” for Prime Minister Saad Hariri’s government and builds on momentum that has marked his term so far, said Rosanna Bou Monsef, a political commentator for the An-Nahar daily.
“But the draft budget falls short in terms of proposing structural reform to limit corruption, to address growing debt, and place restriction on spending,” she added.
Lebanon’s GDP is projected to remain 2.2% for 2017 and the debt-to-GDP ratio reached 149% by the end of 2016, the World Bank said in a report in November.
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