Lebanon Businessnews News

First budget in 12 years
passed by Parliament
No audit of previous

extra-budgetary outlays

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Parliament has approved the state budget for the first time since 2005.
The budget, which is for fiscal year 2017, was ratified without a prior audit of previous extra-budgetary expenditures disbursed during the last 12 years.

The LL1,200 billion earmarked to finance the pay rise of public sector employees was reduced to LL500 billion. This was due to the late ratification of the budget.

The lawmakers have also decided to withdraw a clause regarding the resolution of the construction violations from the budget and to submit it to parliamentary committees for further study within one month.

MP Ibrahim Kanaan, who heads the Parliamentary Finance and Budget Committee, said earlier this month that the amendments made by the Committee resulted in total savings of $670 million. Most of these amendments were disregarded by Parliament.

Kanaan said the ratified budget still includes savings of LL155 billion ($103 million) on the telecoms sub-budget in addition to some other cuts.

Minister of Finance Ali Hassan Khalil said that the 2018 budget will be presented on time.

The credit rating agency Moody’s said in a report released in July: “Parliamentary ratification of the annual budget would be credit positive because it would improve the transparency and predictability of public finances, allow further reforms, and facilitate donor funding.” According to its report titled ‘Lebanon’s Tax Hike Paves Way for Credit-Positive Budget Approval’, a normalized budget process would allow the government to cut the fiscal deficit.

Earlier this year, the Ministry of Finance said it projects a fiscal deficit of $4.8 billion for 2017 compared with $4.9 billion last year. The draft budget submitted by the Ministry included projected revenues and expenditures of $11 billion and $15.8 billion respectively.

Public debt widened to $77.3 billion in August, up four percent compared with the same month a year earlier.
Reported by Shikrallah Nakhoul
Date Posted: Oct 20, 2017
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