The Lebanese parliament on Monday approved a 2022 budget using an exchange rate for customs revenues below the market value of the Lebanese pound, falling short of economic reforms that would pave the way for a deal with the International Monetary Fund.
The deal with the bank is seen as a crucial first step for Lebanon to start emerging from a three-year financial crisis that plunged most people into poverty and plunged the country into its worst crisis since the Lebanese civil war.
In April, an expert agreement between the Lebanese government and the International Monetary Fund called on officials to raise revenues to finance a weakened public sector and allow for greater social spending by calculating customs fees at a “one-time rate of change”.
But Parliament passed a budget that estimated customs tax revenue at £15,000.
On Friday, the market price was set at around 37,000 pounds against the dollar.
The authorities see the approval of a higher exchange rate for imports as unpopular with their voters in a country that relies heavily on imports.
The budget, approved just three months before the end of this year, estimates government spending at 41 trillion lira, or $1.1 billion at Monday market prices, and revenue at 30 trillion.
Wages have tripled for all public sector workers, including those in the army and security forces, with many now earning less than $50, due to the lira’s devaluation of more than 95% since 2019.