Lebanon passes 2022 budget

Lebanon’s politicians approved the 2022 budget following a day of protests outside the Parliament building. The agreement on the budget is one of the key conditions set by the International Monetary Fund for a bailout which legislators are relying on to help the economy.

Legislators on Monday approved the budget with 63 votes in favour and 37 opposed, the state news agency NNA reported.

The budget sets expenditure at 41 trillion pounds (about $1.2 billion under black market exchange rates), while revenues were projected at £30tn.

Retired military personnel clashed with security troops outside the parliament in Beirut on Monday, during a protest against the draft 2022 budget and their financial situation.

Dozens of demonstrators broke through a security barrier on a road that leads up to the Parliament, where the budget was being discussed, prompting soldiers in riot gear to deploy tear gas.

Parliament had been due to discuss the draft budget 10 days ago, but the session was suspended because of the lack of a quorum.

MPs approved the draft budget late on Monday, which tripled salaries for all public sector workers, including the security forces.

In passing the budget, MPs approved the use of an exchange rate for customs tax revenues that is significantly below the market value of the Lebanese currency. But it falls short of an IMF demand that customs taxes be calculated at a “unified exchange rate”. Parliament endorsed a rate of 15,000 pounds to the US dollar, but on Monday the Lebanese pound was trading at about 36,000.

The adoption of an annual budget is one of a handful of reforms that the IMF has demanded if it is to unlock a $3bn aid package that would help to bail out Lebanon. This agreement is seen as a first crucial step for Lebanon to begin exiting a three-year financial implosion that has left most people poor and plunged the country into its worst crisis since the 1975-90 Civil War.