Author Archives: Mounir Rached

An urgent need for reform

An urgent need for reform

There has been a growing concern over Lebanon’s debt outlook. True, the fiscal deficit at end of Q3 2018 was twice that of 2017 for the same period. Two main factors contributed to its escalation: First, the wage and salary increases that were adopted during the last quarter of the 2017 budget and extended through

Fiscal performance and the debt outlook

There has been quite a lot of concern regarding Lebanon’s recent fiscal performance  and its debt outlook. In its Article IV reviews for Lebanon, the International Monetary Fund has repeatedly alerted officials that the debt burden could derail the government from attaining its economic objectives and could be the prime risk source on financial stability,

Dancing around the International Monetary Fund

Last March, Lebanon requested to use $77 million (25% of itsquota) of IMF financing as Emergency Post-ConflictAssistance (EPCA) for the first time since it joined thisinternational financial institution on April 14, 1947. TheIMF’s principal function is to provide balance of paymentssupport, particularly when reserves fall to a critical levelthat could jeopardize financial stability, and to

Implementing Paris III: what it takes

As part of Paris III, the Lebanese government has promisedto embark on a number of fiscal reforms addressing primarilythe revenue side “in view of the relatively limited scopefor further cuts in public spending.” The objective of these reforms is set in paragraph 92 of theParis III reform agenda. It aims at minimizing distortionsand enhancing equity

Paris III provides some relief but debt situation still perilous

The exuberant Paris III conference provided $7.6 billion in concessional pledging; certainly, a positive outcome as concessional loans—loans with flexible terms for the borrower—are more favorable than market borrowing in terms of debt service cost. The donors pledged $1.3 billion in private sector loans reflecting their concern that the sector has been constrained by stringent