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Lebanon approves 2022 budget in step towards IMF loan

By AFP
26 September 2022   |   7:16 pm
Lebanon's parliament on Monday approved the 2022 budget, one of the conditions set by the International Monetary Fund to action a bailout for the crisis-stricken country.

Lebanese army soldiers clash with retired military personnel as they try to break into the parliament in Beirut on September 26, 2022, during a session to approve the 2022 budget. (Photo by ANWAR AMRO / AFP)

Lebanon’s parliament on Monday approved the 2022 budget, one of the conditions set by the International Monetary Fund to action a bailout for the crisis-stricken country.

Lebanon and the IMF had reached a conditional agreement on a $3 billion loan in April to help the country tackle its economic crisis, but the global lender last week condemned the “very slow” progress Beirut has made towards implementing reforms.

Lawmakers on Monday approved the budget with 63 votes in favour and 37 opposed, the state news agency NNA reported.

The approved budget sets expenditures at 41 trillion pounds (about $1.2 billion according to black market exchange rates), while revenues were projected at 30 trillion pounds.

Among the key changes was a “temporary” doubling of public servants’ salaries and pensions, which would now reach a maximum of 12 million pounds (about $324).

The budget has set the dollar exchange rate at 15,000 pounds to the dollar — less than half its rate on the black market — contravening calls by the IMF to unify the various dollar exchange rates functioning across the country.

Lebanon is in the throes of an economic meltdown that the World Bank has branded one of the world’s worst crises in modern times.

The IMF has conditioned its loan on a series of measures, including the approval of the budget as well as reforms to bank secrecy laws, restructuring of the banking sector and the implementation of formal capital controls.

The head of a visiting IMF delegation last week said the country had yet to implement the needed reforms.

“Despite the urgency for action to address Lebanon’s deep economic and social crisis, progress in implementing the reforms… remains very slow,” said Ernesto Ramirez Rigo.