Through the draft budget for the year 2022, and through the parliamentary positions accompanying this project, it is clear how difficult it will be to approve budgets in line with the numbers required to reach an agreement with the International Monetary Fund. The problem surrounding this issue is related to difficult technical, social and political aspects.
Therefore, Lebanon is facing great challenges and difficult conditions to achieve success in getting out of the collapse, such as the return of order to the public finances, stopping the series of annual budget deficits, and turning to a surplus that allows the use of more funds to support the economy. Is it possible to reach the surplus stage, and what is the price required for that?
There was information that President Najib Mikati presented new proposals related to the recovery plan, which some deputies considered a new plan. Mikati proposed what is known as a recovery fund in order to contribute to the return of part of the bank deposits. Mikati stressed that these proposals do not spoil the initial agreement with the IMF, and the deputies asked him to formulate these proposals and refer them to the House of Representatives. The deputies quoted President Mikati that every day of not approving the plan and signing with the IMF costs us a daily loss of 25 million dollars.
In fact, there is nothing difficult if you find the will and determination to get out of the collapse. There is a set of data that may contribute to reaching the era of the primary surplus in the budget.
Achieving a primary surplus is not an easy thing, as the 2022 draft budget itself recognizes a deficit of 20.8%, while estimates indicate a real deficit that will exceed this figure. Thus, crossing from deficit to surplus requires one of two things: Either reduce spending by a large additional percentage, or increase revenues by a sufficient percentage to cover the deficit. And since spending has reached the minimum that it cannot go below, it is likely that there will be a need to introduce amendments that raise the level of spending somewhat, to ensure that the state is running at the minimum level. If the available output is linked to an increase in revenue. This exit becomes narrower and more difficult as time passes, and the general financial situation deteriorates further. And because changing the tax system will not be profitable in this era of the existing collapse, the solutions are either through collecting fees and taxes at a new exchange rate, which in practice means raising taxes and fees by no less than 1500%, or the possibility of completing the demarcation of the maritime borders, and starting Take advantage of the gas wealth. This file is also politically complex.