Lebanon’s 2020 budget fails to address the financial crisis

ENAR

The 2020 budget was expected to be a main pillar of the multifaceted crisis management plan that citizens have taken to the streets to demand. In reality, it fails to meet the urgency of the financial crisis—in fact, the current situation is not referenced at any point in the budget law. The budget approved on January 27 targets a LL6,336 billion fiscal deficit or 8.73 percent of GDP (assuming the economy stagnates in 2019 and contracts by 15 percent in 2020). This is the result of a 15.55 percent drop in budget expenditures and a 11.08 percent drop in revenues when compared to a projection of 2019’s figures. This is a clear attempt to maintain the appearance of relatively stable public finances by conducting an artificial curb-down of public spending. Over-reliance on BDL A key pillar of this reduction is a gentleman’s agreement involving the Ministry of Finance (MoF), the