Parliament hastily votes for 2018 budget. Record projected deficit of $4.82 billion - Lebanon

Parliament hastily
votes for 2018 budget
Record projected deficit of $4.82 billion
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Parliament has approved the 2018 budget after quick deliberations in committee and general session. Members of Parliament have been sharply critical of the budget, but ended up voting in its favor. The passage of the budget was deemed a prerequisite to the upcoming Cèdre donor conference to be organized in Paris on April 6.

The projected deficit is estimated at a record $4.82 billion, up from $3.76 billion in 2017.

Total expenditure is anticipated to be $15.8 billion, to which Treasury transfers to Electricité du Liban (EDL) estimated at $1.4 billion must be added. Total revenue is projected at $12.4 billion. Actual transfers to EDL, which aim to finance the public utility’s deficit, totaled $1.33 billion last year. The growing gross public debt escalated to $80.4 billion at the end of January due to the chronic fiscal deficit.

According to MP Ibrahim Kanaan, Chairman of the Finance and Budget Parliamentary committee, the reforms proposed in the committee’s final report on the 2018 budget include the dissolution of auxiliary departments that were considered part of the public sector. Kanaan said that no funds must be allocated to such departments. One of the proposed reforms is to establish regulatory bodies as required by law in addition to filling existing job vacancies in the public sector. The proposals include the necessity of applying the law that governs public-private partnerships (PPPs). They also include a proposal to implement a five-year plan to support the agricultural sector.

At the Cèdre conference, the government will submit the first two phases of the country’s $22.9 billion Capital Investment Program (CIP). The Program consists of $16.7 billion in projects, spanning eight to ten years. The CIP, which was recently approved by the Cabinet, aims to finance infrastructure projects mainly in transportation, electricity, water, and irrigation.

Reported by Shikrallah Nakhoul
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Date Posted: Mar 29, 2018