Lebanon’s public debt will rise to USD 61bn by end-2013 and reach USD 65bn in 2014 on higher spending and faltering budget revenue despite the introduction of new taxes, the caretaker finance minister, Mohammed Safadi, told the Daily Star. Lebanon’s public debt currently stands at USD 59bn, comprising 135% of the full-year GDP, according to official estimates. The recently approved minimum wage hike is one of the factors boosting spending, Safadi said.
In March, Safadi submitted an updated 2013 state budget reducing spending by LBP 2tn to LBP 21.23tn (USD 14.1bn). Safadi, however, upped the forecast budget gap for 2013 to LBP 5.247tn due to lower revenue expectation. Safadi noted that the 2014 draft budget envisages a deficit of at least USD 5bn, or 38% of spending.
Lebanon must achieve an 8% GDP growth to boost state income but such an outlook is not feasible amid the current political and security situation, the minister said. He underscored, however, that budget revenue has remained at an acceptable level despite domestic turmoil. “Revenues have dropped by 4% and this is quite acceptable under these delicate circumstances,” Safadi said. The budget deficit will likely total USD 3.5bn in 2013, he added.
The finance ministry will not sell new Eurobonds in 2013 but might issue USD 1bn worth of T-bills, Safadi said. He forecast a 1-2% GDP growth in 2013.
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