Budgeting for the future

Lebanon passed its second state budget in less than six months at the end of March, after being without one for almost 12 years. The 2018 state budget was hastily pushed through cabinet and Parliament ahead of early April’s CEDRE infrastructure investment conference in Paris, and it mandated spending cuts meant to please international donors. The government’s concluding statement at CEDRE promised to reduce Lebanon’s deficit by 5 percentage points of GDP over five years. The cuts to spending may be an indication that local politicians want to do something about the deficit, but not much can actually be done to lower state spending without solving some of Lebanon’s more pressing structural fiscal problems, or by increasing revenues to the state treasury. At the time of writing, Article 49 of the 2018 budget law was suspended by the Constitutional Council, following an appeal of several articles of the law by