Banque du Liban governor warns against extra government spending

04 February 2009
The governor of Banque du Liban, the central bank of Lebanon, has warned that any additional demands for government spending will hurt the country's already beleaguered public finances.

Riad Salameh was speaking after a meeting in Beirut on 3 February with Michael Geoghegan, the group chief executive of HSBC, a UK bank.

"We should realise that the elements that cause the weakness of our monetary policy are related to the budget deficit and public debt," Salameh said, in remarks reported by the local Daily Star newspaper.

Lebanon's parliament is currently debating the country's £Leb11bn draft budget for the coming year.

Some pro-Syrian parties, such as the Amal movement, are demanding extra government spending for local government bodies under their control.

Salameh added that Lebanon's economy grew by some 7 per cent in 2008, with inflation for the year at between 7 and 10 per cent.

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