Lebanon’s government has revealed the country’s first budget in 12 years after discord and political paralysis had prevented politicians in past years from agreeing on a figure.
The budget will have a deficit of $4.86 billion on spending of $15.78 billion while economic growth in 2017 is expected to be 2 percent, the country’s finance minister said.
Ali Hassan Khalil said the government did not put new taxes on the poor, adding that it aims to improve tax collection. Lebanon’s debt to GDP ratio is currently 144 percent and the aim is to bring it down to 124 percent in 2022, he said. Lebanon has a debt of about $74 billion.
Lebanon descended into a crisis following the 2005 assassination of former Lebanese Prime Minister Rafic Hariri.
The situation worsened after Syria’s crisis began in March 2011, with Lebanese groups backing rival sides in the conflict and the influx of more than 1 million Syrian refugees into the country who have been a burden on Lebanon’s infrastructure.
Billions of dollars were spent in extra-budgetary spending since then.
The situation began to improve in October after leading Christian politician Michel Aoun was elected president and Prime Minister Saad Hariri formed a national unity cabinet.
“The Lebanese government succeeded and made an achievement by approving the 2017 budget,” said economist Ghazi Wazni. “Lebanon had been spending without budget and this is bad and negative for the finances because it increases deficit, random spending and lack of discipline in spending.”
Cabinet approved the budget late Monday and it now goes to parliament for approval.
Khalil said that the government aims to reduce the deficit to 8.7 percent of gross domestic product, compared with 9.3 in 2016.