LEBANON - Finance
HE Ali Hasan El Khalil holds a degree in Law from the Lebanese University and is also an appeals lawyer. He has belonged to the ranks of the Amal movement from a young age and took over several responsibilities in the movement, most recently in charge of the province of Beirut. He is a member of the body of presidency in the Amal movement and head of the Union of Youth of Lebanon. He was elected deputy in 1996 elections for one of the two Shiite seats in Marjayoun-Hasbaya, and reelected in 2000, 2005, and 2009. He was appointed Minister of Agriculture in the government of martyred PM Rafik Hariri, 2003-04, and the Minister of Health in the government of PM Najib Mikati in 2011.
Setting a limit for the deficit in the short and medium terms is one of our primary objectives at the Ministry of Finance, since it provides guidelines for our capacity to spend and ensures a sustainable debt path. The ratio of outstanding public debt to GDP in Lebanon is among the highest in the world. As of end December 2013, total public sector debt was 138% of GDP. While the ratio has come down from its peak of 180% in 2006, this ratio has increased most recently from 132% at the end of 2012 to 138% at the end of 2013. The main objective of public debt management is to ensure that the government’s financing needs and its payment obligations are met at all times, at the lowest possible cost over the medium to long term and consistent with a prudent, acceptable degree of risk. As public debt management is highly interdependent with monetary policy, the essential coordination is institutionalized in the High Debt Committee. On the other hand, the solid financial and banking systems play an important role in financing the deficit in both local and foreign currencies.
The Ministry of Finance has undertaken extensive measures to improve collection in several areas, primarily in income taxes, VAT, and property taxes, and to increase the tax compliance.
The Ministry of Finance ensures that capital spending is disbursed in a balanced manner throughout the country and through several sectors. In addition, the Ministry contributes to enhancing the credit growth through the interest subsidy.
The remittances inflows have a substantial role in providing a resource base for the Lebanese banking system, as well as in providing it with foreign currency—one of the prime sources of accumulating reserves in the Central Bank, which supports Lebanon’s policy of stabilizing the exchange rate.
Lebanon has several investment opportunities, primarily in midsized manufacturing and services, and in technology services. The Ministry of Finance promotes investment by improving the infrastructure and supporting these sectors, as well as through the provision of exemptions allocated to some newly established industries
The Ministry of Finance expects the economy to maintain a low rate of inflation, and a stable growth rate in the range if 2.5%. We predict most activities to maintain their pace of performance with the exception of the tourist sector, which has been suffering due to the difficult regional situation. The banking system is expected to continue attracting inflows that support overall financial stability of Lebanon’s economy.
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