Tawile: Lebanon's Economic Figures Jeopardize CEDRE

  • Economics
Tawile: Lebanon's Economic Figures Jeopardize CEDRE

Head of the Kataeb's Economic and Social Council, Jean Tawile, described the latest figures issued by the Finance Ministry for the first six months of 2018 as "alarming", warning that they serve as a proof of Lebanon's inability to adhere to the 2018 state budget ratified by the Parliament.

According to the Finance Ministry, the state's revenues decreased by 2% while expenditures increased by 28.85%. Tax revenues also shrank by 3.2%, while the public deficit has rocketed by 234.36%.

"These figures indicate clearly that the state is failing to manage the country's finances," Tawile said in an interview with the Arab Economic News website.

"There is a serious problem about public expenditures, knowing that the cost of the salary scale, which was initially estimated at around $800 million, will likely reach $1.4 billion; this is 70% more than it was expected when the law was approved," he explained.

"No one paid heed when we demanded that an in-depth study would be conducted to assess the economic impact of the salary scale and to determine its cost. Today, it has become clear that what we said was right."

Tawile stressed that imposing new taxes was not and will never be the optimal solution to this problem, adding that this is shown in the Finance Ministry's figures according to which tax revenues fell by 3.2%.

"This clearly means that the new levies have affected the citizens' purchasing power while failing to boost the state' tax revenues. The new levies have also contributed to increasing tax evasion; a key problem that needs to be addressed," he pointed out.

Tawile said that a report issued by the Audi Bank in 2017 noted that tax evasion had reached around $4.2 billion in 2016, expecting that it rose to $4.9 in 2017.

"The most major problem lies in the fact that the public deficit is expected to transcend $6 billion, with a debt-to-GDP ratio hitting 11%," Tawile pointed out. "It is worth noting that countries that took part in the CEDRE conference requested that Lebanon's deficit would be decreased by 5% annually."

"The soaring deficit jeopardizes CEDRE. It is impossible for Lebanon to deceive the international community and the countries willing to support it," Tawile stressed.

"There is no escape from the financial and structural reforms requested in CEDRE. But the main question to ask is: who will carry out those reforms?"


Source: Kataeb.org