Prime Minister outlines key
measures affecting livelihood

Electricity, inflation, social safety nets

In a press conference, Prime Minister Nawaf Salam addressed the public regarding the pressing economic challenges facing the nation. He outlined a series of measures and policy decisions implemented by his government to alleviate the rising cost of living, curb inflation, and improve daily conditions for citizens. The Prime Minister detailed key initiatives across critical sectors, including long-term energy and electricity plans, expanded social safety net spending, infrastructure maintenance, and newly launched housing and public transportation projects.

Everyday financial strain

The Prime Minister acknowledges the severe pressure facing families, specifically noting the high costs of private generator bills over the past two months, gasoline at filling stations (where drivers must choose between filling their tank or buying household necessities), school tuition, transportation, textbooks, and medical expenses (where sick individuals hesitate to seek testing or buy medication due to costs).
• Widespread impact across society: This financial strain is not limited to the most impoverished families. It impacts civil servants, retirees, military personnel, teachers, and small-business owners who work tirelessly yet cannot keep up with the cost of living.
• Government accountability: He validates the public’s right to complain and demand answers. He refuses to downplay their suffering or tell citizens to simply adapt, affirming that the government’s duty is to ease these burdens, prevent exploitation, and achieve a tangible difference in their daily lives.

Economic assessment and external shocks

• Post-War economic contraction: Last year, following years of decline, the Lebanese economy grew by 4.2 percent, signaling the start of a recovery. However, the war imposed on the country halted this progress, pushing the economy into a projected contraction of 6.4 percent this year.
• Impact of global energy crises: Regional crises have doubled global oil prices—particularly for diesel and gasoline—following the closure of the Strait of Hormuz.
• Import dependence: Higher shipping and insurance costs have inflated the prices of imports, transportation, and local production. Lebanon is hit harder than many other countries because of its heavy reliance on imported food, clothing, medications, and electrical appliances.
• External vs. internal factors: While global oil prices and shipping routes are outside the government’s control, the government refuses to use these external factors as an excuse to avoid its internal duties.

Market oversight and consumer protection

• Cracking down on profiteering: The government will not allow certain private generator operators, traders, or importers to exploit price hikes to make unlawful profits at the expense of citizens through unjustified price increases or extra fees.
• Enforcement directives: The Consumer Protection Directorate has been instructed to intensify field inspections and monitoring within its capacity.
• Generator regulations: Authorities are enforcing mandatory meter usage and official pricing for private generators, issuing citations against violators, and referring them to the judiciary for prosecution.
• Passing on cost reductions: Any drop in import or shipping costs must immediately be reflected in lower prices for consumer goods and services.

2027 budget and public sector compensation

• Budget growth: Despite economic difficulties, improved revenue collection has allowed the draft 2027 budget to reach approximately $7 billion, up from $3.5 billion when the current cabinet was formed. While this enhances the State’s ability to fund public services, it does not mean the government has a surplus capable of covering every project request.
• Public salary corrections: A major portion of this budget increase ($1.2 billion in additional allocations) is dedicated to correcting public sector, military, and educational salaries that lost their value after 2019.
• Salary adjustments granted: The government approved six additional salary steps (increments) for public employees and military personnel, raised family allowances, increased the minimum wage, and updated the daily transportation allowance to cover commuting costs.
• Monetary stability protection: Spending must remain balanced with revenues to avoid triggering inflation or currency instability. The government will not fund operational expenditures through debt or treasury advances, avoiding past policies that cost citizens their savings.

Social spending and public services allocations

• Social sector allocation: Approximately 56 percent of the 2027 draft budget is dedicated to social spending.
• Ministry of Public Health: Allocations for the Ministry of Public Health were increased by nearly 16 percent compared to the current year to expand coverage for hospitalization, medications, and primary healthcare, thereby reducing out-of-pocket costs for families.
• ESSN / AMAN social safety net: The State’s budget contribution to the AMAN social protection program was raised to $70 million. Combined with expected World Bank funding, the number of beneficiary families will expand in 2027 from 100,000 to 150,000.
• Economic empowerment program: $20 million is allocated to a specialized economic empowerment program providing vocational training, equipment purchases, production tools, and direct support for small businesses, artisans, and farmers.
• Public works and infrastructure: Funds are budgeted for road paving, maintenance, and public infrastructure across all regions.
• Non-sectarian access: The Prime Minister emphasized that all State services, health coverage, social assistance, and agricultural support belong to all eligible citizens equally, rejecting any sectarian or regional distribution.

Revenue generation, tax policy, and evasion reinforcement

• No new mass taxes: The 2027 draft budget introduces no new general taxes on the public.
• Fee adjustments and luxury taxes: Aside from updating existing government service fees to match realistic exchange rates, the only new taxes introduced target luxury assets—specifically private yachts and private jets.
• VAT evasion enforcement: The Ministry of Finance issued payment notices to 107 companies for unpaid Value Added Tax (VAT) totaling approximately $36 million. Additional files under review account for an estimated $200 million to $250 million in unpaid VAT, with a new batch of formal notices currently being prepared. The Prime Minister clarified that this is not a new tax, but money already collected by these companies from consumers at the point of sale that was withheld from the treasury.
• Corporate income tax audits: Audits are underway focusing on 64 major corporations across various commercial sectors.
• Customs enforcement: Customs revenues have doubled due to improved collection, expanded digital monitoring, improved inter-agency coordination, and the recruitment of new customs personnel.
• Quarries and coastal property recovery:
o Quarries: Collection notices totaling hundreds of millions of dollars were issued to quarry operators. While operators are challenging these in court, the state is pursuing recovery through the judiciary.
o Maritime public domain: The Army was commissioned to conduct an updated survey mapping all maritime property infringements. The State is re-evaluating fees to reflect current real-market values.

Initiatives to lower living costs

• Electricity sector efforts: The Cabinet is working with the Ministry of Energy and Water and the Ministry of Finance to implement solutions that increase State electricity supply while reducing household energy expenditures over the medium term, with further details to be announced soon.
• Public transport driver subsidies: A draft law sent to Parliament proposes providing financial support of LL12 million monthly per driver for three months to eligible public transit drivers, provided they adhere to official fare caps.
• Public transit: The government is launching an urban and inter-city public transportation network. The first phase introduces 250 new buses to reduce daily commuting costs and traffic congestion, with full details to be presented by the Minister of Public Works and Transport by the end of the following week.
• Solar energy loans: The draft 2027 budget includes dedicated funding for the Public Housing Corporation to offer subsidized loans for residential solar power systems, reducing household reliance on private generators. The Ministry of Finance and Cabinet are currently evaluating expanding these allocations.
• Housing loans: The Public Housing Corporation will resume issuing housing loans to low- and middle-income families to assist younger citizens in homeownership.

Closing commitments

The Prime Minister acknowledges public skepticism toward empty promises, stating that while conditions cannot change overnight, the government will strictly enforce consumer protections, pursue all State revenues through the judiciary, and personally oversee the implementation of these measures.