The 2022 general budget was approved by the government on February 10 and praised for using realistic exchange rates ranging between 15,000 to 20,000 Lebanese pounds (LBP) to the dollar. Before the onset of the financial crisis, the national currency was pegged at 1,500 LBP to the dollar. The budget draft was marketed as an important step for reaching an agreement with the IMF.

From LIMS’ perspective, the 2022 budget lacks reforms and is quite like its predecessors, as it runs on 7 trillion LBP in deficit. In fact, LIMS expects deficit to be larger because the budget excluded government-owned electricity company’s losses, and inflated expected income relying on a drastic rise of fees, tariffs, and taxes. Higher tariffs and taxes on an already exhausted population will not generate more income, rather it will have recessionary impact. Given the government’s inability to borrow from the financial markets, the deficit will be financed through inflation and currency devaluation.

Therefore, LIMS suggested repealing fuel subsidies and adjusting social benefits in a way to eliminate the fiscal deficit and allow the government to build a recovery plan on solid foundations. LIMS also recommended reducing tariffs to offset the currency devaluation and reforming the tax system through the adoption of a flat tax. Making such a move would broaden the tax base.

• Changing Customs Exchange Rate Must Be Coupled With Lower Tariffs, February 2, 2022: MTV, TV Interview AR
• Which Commodities Will Be Most Impacted By The New Customs Fees? February 3, 2022: VDL, Radio Interview AR
• The Impact Of Higher Tariffs On The Car Market, February 3, 2022: Media One, Radio Interview AR
• General Budget Similar To Its Predecessors, February 4, 2022: VDL News, Radio Interview AR
• Budget Deficit Will Lead To Inflation And A Weaker Exchange Rate, February 4, 2022: NBN, TV Interview AR
• Customs Are Detrimental To The Economy And Must Be Repealed, February 5, 2022: VDL, Radio Interview AR
• Lebanese Experts Urge Structural Reforms To Prevent National Collapse, February 9, 2022: Xinhua, Article EN
• What Hurdles Stand In The Way Of The General Budget In Parliament? February 11, 2022: VDL, Radio Interview AR
• What Is The Impact Of Changing The Customs Exchange Rate On Prices? February 12, 2022: Mariam TV, TV Interview AR
• Who’s Responsible For IMF Talks Breaking Down? February 14, 2022: Al Joumhouria, Article AR
• How Will The General Budget Impact The Lebanese Economy? February 14, 2022: Lebanon On, Article AR
• The Consequences Of Raising Tariffs, February 15, 2022: Al Afkar, Article AR
• Spending Goes By Decrees, And Revenues Are Collected Arbitrarily With A Parliamentary Authorization, February 24, 2022: Nidaa Al Watan, Article AR
• Lebanon On The Hunger Hotspots List: In-Kind Donations Not Sustainable, February 4, 2022: GrandLB, Article AR
• Difficulties In Reaching An Agreement Between The Lebanese Government And The IMF, February 4, 2022: Al Mamlaka TV, TV Interview AR