'Economic, financial and fiscal indexes show a marked improvement following the Paris II conference,' said Finance Minister Siniora. Supplanting short-term, high-interest loans with long-term, low-interest debt had helped to breathe new life into the economy, he said, but cautioned that 'the failure to implement the necessary structural reforms has led to a less-than-required, but realistic, 2004 budget proposal'.
According to Siniora's figures, the lion's share of total expenditure - 86 per cent of the budget excluding debt servicing - is allocated to non-discretionary expenses. Total expenditure, excluding debt servicing, is projected at $3,300 million, compared with $3,066 million in 2003. Some $2,266 million - 69 per cent of the total - is allocated for public sector wages and related expenses.
Total revenue is projected at $4,266 million with an initial surplus of $966 million. Debt servicing is forecast to rise to $2,866 million in the absence of further privatisation measures. 'The 2004 draft budget does not include any reform articles,' Siniora said. 'Non-implementation of reforms and privatisation led to a much higher deficit than the 25 per cent projected for 2003.'
However, he stressed that the deficit may drop below 30 per cent next year if proposed reforms - including the privatisation of the telecoms and electricity sectors - were implemented.
Exchange rate: $1=£Leb 1,508
A MEED Subscription...
Subscribe or upgrade your current MEED.com package to support your strategic planning with the MENA region’s best source of business information. Proceed to our online shop below to find out more about the features in each package.