BEIRUT: Lebanon's top officials declared a "state of economic emergency" Monday, calling for "sacrifices" to pull the country out of the slump.
The meeting brought together the heads of Lebanon's rival political parties, along with Central Bank Governor Riad Salameh and President of the Association of Banks Selim Sfeir.
Lebanon finds itself in a precarious situation, as economic uncertainty coupled with increasing tensions with Israel risk pushing it over the edge.
"We must take the steps necessary to complement the decisions contained in the 2019 budget, in terms of strengthening the state's finances and reducing its deficit, and of course pave the way for the adoption of the 2020 budget within the constitutional timeline," President Michel Aoun said.
Talks centered around proposed measures to cut the budget deficit to around 6 percent of GDP after it skyrocketed to over 11 percent in 2018.
These include setting a minimum price on gasoline (to be decided on at a later date), raising the value-added tax from 11 to 15 percent on certain products (to be decided on at a later date), setting subsidies for the state-run Electricite du Liban at $989,805,000 till 2020, freezing state employee raises for the next 3 years, increasing the tax on interest earned from 10 to 11 percent, and a 500 Lira and 1,000 Lira tariff on local and imported cigarettes, respectively.
Corruption-plagued Lebanon suffers from one of the world’s highest debt ratios, high unemployment and little growth. Officials also vowed to tackle corruption, illegal smuggling and tax evasion.
MP Najib Mikati said following the meeting that he "was expecting drastic measures given the severity of the situation" yet expressed doubt that they "will be implemented."
The meeting at the presidential palace came 10 days after international ratings agency Fitch downgraded Lebanon’s ratings.
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