Lebanon’s parliament passed the 2020 budget on Monday although its finance committee chief said the forecast revenues might be unrealistic as the country wrestles with a major economic and financial crisis.
The 2020 budget envisages a deficit of around 7% of GDP, the head of parliament’s budget and finance committee, Ibrahim Kanaan, said, wider than the originally hoped-for 0.6% with the economy shrinking and choked by a liquidity crunch.
Prime Minister Hassan Diab, whose cabinet took office last week, told parliament he would not obstruct the state budget.
Lebanon’s crisis is rooted in decades of state corruption and waste that have landed it with one of the world’s heaviest public debt burdens. Foreign donors have said any support to Lebanon will depend on it enacting long-delayed reforms.
During Monday’s parliamentary session, Kanaan said projected revenues might not be realistic because of a contraction in the economy.
Kanaan also said interest rates should be cut or the state revenues would not be able to cover debt servicing. He added that he had heard rates would be cut “and we are waiting for the full commitment”.