Despite the government’s approval of the 2024 budget in January, public sector employees have intensified their demands for a salary increase following months of strikes. LIMS raised concerns about inflated revenue projections and excessive expenditure, casting doubt on the feasibility of achieving a balanced budget essential for economic revitalization. With Lebanon’s economy shrinking from approximately $54 billion before the crisis to less than $20 billion presently, the government’s current revenue streams will fall short of meeting projected expenditures, rendering further salary increases for public sector employees unrealistic.

The financing of an undisclosed budget deficit and a potential salary hike poses significant challenges, especially with Lebanon’s limited access to debt markets due to sovereign default. Alternatively, financing this deficit through the central bank, a common practice in Lebanon, risks depleting foreign exchange reserves, enhancing the banking crisis and triggering a new wave of hyperinflation.

LIMS recommended a reduction in public sector employment, allowing half of the current workforce to voluntarily exit their positions, as many already have alternative opportunities in the private sector or abroad. This measure would generate savings, creating room for a partial salary increase. Addressing nepotism and favoritism in public sector hiring is crucial for Lebanon’s recovery, as it would streamline operations and foster a more productive workforce.

• After Its Approval, Does Lebanon’s 2024 Budget Align with Its Escalating Economic Crisis?, February 5, 2024: Al Estiklal, Article AR
•  Fakrajan: The Budget Will Lead to Exchange Rate Collapse, February 6, 2024: Beirut24, TV Interview AR
•  Lebanon’s 2024 Budget Aggravates the Crisis in the Private Sector, February 6, 2024: Asharq Business, Article AR
• How Can Deficit Reduction Save The Economy? February 9, 2024: Al Jadeed, TV Interview AR
• Karaki Specified The Exchange Rate Of The Dollar At 89,500 LBP For Real Estate: The Social Security Is A Failed Institution, And It Is Necessary To Reconsider Its Status. Bou Diab: It Does Not Negatively Impact Employers’ Situations, February 13, 2024: Addiyar, Article AR
• The Rhythm of Their Next Moves Cannot Be Regulated… Will the Demands of Public Sector Employees Be Met? February 19, 2024: Lebanon24, Article AR
• Raising The Prices Of Government Services In Lebanon… Who Monitors And Who Holds Accountable? February 24, 2024: Spotshot, TV Interview AR