Lebanon cuts spending by $1.3bn

Finance Minister Mohammad Safadi amends budget to reduce costs
Lebanon cuts spending by $1.3bn
Lebanons Finance Minister Mohammad Safadi (right) put forward an amended budget to parliament for 2013 that cuts spending by $1.33bn
By Massoud A. Derhally
Mon 11 Mar 2013 09:43 AM

Lebanon's Finance Minister Mohammad Safadi put forward an amended budget to parliament for 2013 that cuts spending by LL2 trillion ($1.33bn) from a draft proposed last year, as the government tries to check the country's fiscal deficit and debt.

Public spending was fixed at LL21.229 trillion ($14.1 billion), and the fiscal deficit was set as at LL5.247 trillion ($3.5bn), according to a statement from the minister's office.

The fiscal deficit is forecast to be about 8 percent of gross domestic product in 2013, relatively unchanged from last year, according to Deutsche Bank estimates.

Economic growth in Lebanon has slowed as a result of the two year old conflict in Syria. Lebanese supporters of the regime of Syrian leader Bashar Al Assad and those that oppose him have violently clashed in different parts of the country.

The economy is forecast to grow about 2.5 percent according to International Monetary Fund estimates, up from 2 percent last year.

Lebanon has a public debt of about $56bn, one of the highest in the world accounting for 135 percent of the country's gross domestic product. The country amassed the debt in the reconstruction phase that followed the end of a 15-year civil war in 1990 and after a month long war with Israel in 2006.

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