Lebanon eyes austerity package to slash deficit
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.