Lebanon eyes austerity package to slash deficit

Published April 18, 2019
"If we continue like this we will reach a catastrophe," says Lebanese Prime Minister Saad Hariri. ─  AP/File
"If we continue like this we will reach a catastrophe," says Lebanese Prime Minister Saad Hariri. ─ AP/File

BEIRUT: Lebanon is set to impose austerity measures to combat its bulging fiscal deficit, Prime Minister Saad Hariri said on Wed­nesday, warning of an economic “catastrophe” if public spending keeps rising.

“As a government, we are required to issue the most austere budget in Lebanon’s history because our financial position doesn’t allow us to increase spending,” Hariri told reporters after a session of parliament.

“If we continue like this we will reach a catastrophe,” he said, one-year after his government committed to slashing public spending in order to unlock billions in aid pledged by international donors.

Hariri did not specify what measures his government was mulling but hinted the package may include wage cuts for soldiers.Lebanon is one of the world’s most indebted countries, with public debt estimated at 141 percent of gross domestic product in 2018, according to credit ratings agency Moody’s.

The budget for 2019 has yet to be finalised, but public sector workers fear that austerity measures may mean cuts to their salaries.

Hundreds of civil servants protested in central Beirut to denounce any such move.

The demonstrations came as part of a nationwide public sector strike that affected schools, universities, state-run media outlets and the tourism ministry’s offices.

Lebanese Foreign Minis­ter Gebran Bassil on Satur­day proposed to reduce public sector wages, warning that “there will be no salaries for anyone” otherwise.

Published in Dawn, April 18th, 2019

Follow Dawn Business on Twitter, LinkedIn, Instagram and Facebook for insights on business, finance and tech from Pakistan and across the world.

Opinion

Editorial

Smog hazard
Updated 05 Nov, 2024

Smog hazard

The catastrophe unfolding in Lahore is a product of authorities’ repeated failure to recognise environmental impact of rapid urbanisation.
Monetary policy
05 Nov, 2024

Monetary policy

IN an aggressive move, the State Bank on Monday reduced its key policy rate by a hefty 250bps to 15pc. This is the...
Cultural power
05 Nov, 2024

Cultural power

AS vital modes of communication, art and culture have the power to overcome social and international barriers....
Disregarding CCI
Updated 04 Nov, 2024

Disregarding CCI

The failure to regularly convene CCI meetings means that the process of democratic decision-making is falling apart.
Defeating TB
04 Nov, 2024

Defeating TB

CONSIDERING the fact that Pakistan has the fifth highest burden of tuberculosis in the world as per the World Health...
Ceasefire charade
Updated 04 Nov, 2024

Ceasefire charade

The US talks of peace, while simultaneously arming and funding their Israeli allies, are doomed to fail, and are little more than a charade.