Finance and Budget Committee President Ibrahim Kanaan, at a press conference on Monday (Credit: NNA)
The parliamentary Finance and Budget Committee merged the 2023 and 2024 budgets on Monday during a meeting.
While the 2023 budget is several months behind in the adoption process, the 2024 budget is still on schedule according to the timelines set in the Constitution.
According to the budget project figures that L'Orient-Le Jour was able to consult, the new project forecasts a deficit of 18,000 billion Lebanese pounds, or 211 million dollars at the chosen rate of 85,000 Lebanese Lira per dollar. The black market rate is currently around 90,000 LL per dollar.
According to our calculations, this represents 6.1 percent of public expenditure, a much lower ratio than the originally planned 13.8 percent in the 2024 budget project and 24 percent of the 2023 budget.
Revenues amount to 277,000 billion Lebanese Lira. The President of the Committee, Deputy Ibrahim Kanaan of the Free Patriotic Movement (FPM, Aounist), stated at the press conference after the meeting that this objective will be difficult to achieve.
According to Kanaan, the deputies have decided to examine the text despite violations of the Constitution.
The deputies have noted two violations of the Constitution in the budgets:
First, the fact that the budget project was transmitted without being signed by all outgoing ministers of the government.
Second, the fact that the government did not submit to Parliament the "final financial statement" for the year 2023, as required by the Constitution, which governs the process of closing public accounts.
Kanaan also said the budget project lacks an economic vision and that the choice of fiscal measures adopted to increase public revenues by aligning the exchange rate used is likely to cause significant imbalances.
Outgoing Finance Minister Youssef Khalil assured that the alignment of the exchange rate is not a tax increase but a process of aligning with the market exchange rate used by the tax administration to calculate taxes and fees.
While the value of the Lebanese pound has collapsed over four years of crisis, marked by banking restrictions, the administration has long maintained the old official exchange rate of 1,507.5 Lebanese pounds to the dollar for tax and fee calculations.
The administration only began to change this method at the end of last year, with the late implementation of the 2022 budget.
The committee plans to meet again next Monday to continue examining the document, which must be approved by the full assembly of Parliament to become applicable.