Lebanon’s public debt is expected to hit a massive $71billion by the end of the current year from the current $66.1bn, Finance Minister Ali Hassan Khalil reveals.
Lebanon, whose economy was hit hard by regional turmoil, is also projected to report a budget deficit of $5bn in 2015, the minister continues, the national economy is forecast to grow by 2.5 per cent.
Khalil warns that the deficit had swelled, comprising 10.2 per cent of the Gross Domestic Product, and could go up further.
Speaking about the 2015 state budget, the minister notes the bill which will be discussed by the cabinet this week, envisages a total public spending of $15bn. Spending in the draft budget is equal to 30.7 per cent of Lebanon’s GDP. The major rise in spending is driven by a hike in the salaries of public servants and teachers.
About 30.6 per cent of the 2015 draft budget is allocated for public debt service; 17.2 per cent for public sector salaries; 13.2 per cent for electricity; 10.2 per cent for retirement salaries; 6.3 per cent for budget reserves and eight per cent for investment allocations such as infrastructure projects.
According to Khalil, taxes and other sources of revenue could not be increased since the state has exhausted all possible revenue streams.
“The current draft budget figures indicated the government was neither able to increase revenues nor reduce expenses.” the minister asserts. “Economic policies should be adjusted and oil and gas exploration be launched as quickly as possible.”
Noteworthy, Lebanon has not had an official budget since 2005 due to political standoffs, repeated security incidents and the failure to convene parliament to discuss these bills.