|Lebanon's finance minister projects 4.5 percent GDP growth in 2009
|Finance Minister Jiahd Azour on Wednesday projected real GDP growth of 4.5 percent in 2009 from 3 percent in 2008. Azour, in a long memo to all ministries, said that these projections are partly based on the medium-term budget expectations in 2009. The minister said the real economic growth in 2009 should be 4.5 percent, 5 percent in 2010 and 5 percent in 2011.
Azour also projected that Lebanon's GDP would reach $28.404 billion in 2008, $30.421 in 2010 and $32.580 billion in 2011.
The government of Prime Minister Fouad Siniora, which will resign once the commander of the Lebanese Armed Forces, General Michel Suleiman is elected president on Sunday, is struggling to boost the size of the economy to reduce the public debt to GDP ratio, currently the second highest in the world.
The 2009 draft budget, still to be approved by Parliament, aims at reducing deficit spending from 30.7 percent of total outlays to 27.5 percent.
The memo stressed that all ministries should abide by the strict spending limits set by the Finance Ministry.
It added that there would not be additional allocations of funds for any ministry unless this spending improves public services in general.
Total expenditures in 2009 was set at LL13.162 trillion, LL13.133 trillion in 2010 and LL13.524 trillion in 2011.
The cost of debt servicing remained the biggest spending item in the government budget, followed by the salaries of public employees.
In 2009, the cost of debt servicing is projected to be LL5,163 trillion, LL4,906 trillion in 2010 and LL5.316 trillion in 20111.
On the revenue side, the memo expected government income to rise by 21.3 percent in 2009 and 23.2 percent in 2011.
The memo based the increase in government revenues to the expected income generated from the privatization of state-owned assets.
The government was forced to delay the privatization of the telecom sector several times due to the political deadlock and the withdrawal of six ministers from the Cabinet.
Officials said that the new government will try to push for privatization once a new president is elected.
The Daily Star