Caretaker Prime Minister Najib Mikati (center) chairs a meeting on the preliminary draft budget for 2023, which is still in preparation. (Credit: Dalati & Nohra)
In a statement released Tuesday, caretaker Finance Minister Youssef Khalil said he was "committed" to finalizing the preliminary draft budget for 2023 "despite the challenges," and that the draft will be "submitted shortly" to the cabinet for consideration.
His statement comes on the sidelines of a Grand Serail meeting between Khalil, caretaker Prime Minister Najib Mikati, caretaker Deputy Prime Minister Saade Chami and former MP Nicolas Nahas, an advisor to Mikati.
Khalil said the preliminary draft would include the fiscal adjustment measures adopted this year, such as raising the exchange rate used to calculate customs duties or VAT, as well as the salary increases granted to civil servants.
Reacting to the June report from the International Monetary Fund (IMF), the minister said Lebanon could achieve higher growth rates than those anticipated by the organization if the IMF recommended reforms were implemented.
In its most optimistic scenario, the IMF was counting on a return to growth as early as 2024 (+3.9 percent), after a 2023 marked by a slight contraction in GDP (-0.5 percent).
Khalil also indicated that the cabinet was currently working with donor states and organizations, as well as the Civil Service Council, on a survey to serve as the basis for a reform of public administration employment.
'A few details' remain
According to a cabinet source who spoke on condition of anonymity because were not authorized to speak to the press, the preliminary draft budget could be completed within "a week," as only "a few details" remained to be ironed out.
The source added that the process was being held up by "staffing problems" within the Ministry of Finance. Civil service work has been interrupted by recent strikes calling for increased wages in line with the collapse of the national currency, which has lost 98% of its value since the start of the crisis.
The preliminary draft budget is only the first step in a long process to adopt a state budget to organize public spending and revenue over the given year.
The preliminary draft budget drawn up by the Ministry of Finance must, in principle, be examined, amended and then approved by the cabinet. The draft is then forwarded to Parliament, where it is reviewed by parliamentary committees before being examined and possibly approved during the ordinary autumn session, on the first Tuesday after Oct. 15.
The entire process of adopting the 2023 budget should have been completed by the end of January.