LEBANON - The International Monetary Fund (IMF) mission continued its technical meetings with Lebanon’s Ministry of Finance on September 17, focusing on developing a five-year medium-term fiscal framework and coordinating fiscal and sectoral priorities.
The meetings brought together directors, officials, advisers and technical experts from the Ministry of Finance and other relevant public institutions as the IMF mission, headed by Ernesto Rigo, continued discussions on Lebanon’s fiscal policy and reform priorities.
The medium-term fiscal framework aims to set overall expenditure ceilings and spending limits for individual ministries, providing a longer-term basis for budget planning and allocating public resources.
Infrastructure and Energy Projects Reviewed
The third day of meetings included a session on infrastructure and energy, attended by representatives of the Council for Development and Reconstruction (CDR), the Ministry of Public Works and Transport, and the Electricity Regulatory Authority.
Discussions focused on the country’s project portfolio, including a review of ongoing projects, projects that were cancelled, and projects that could not be implemented because of insufficient appropriations or a lack of economic viability.
The meeting also examined reconstruction projects and related studies, as well as coordination mechanisms for identifying priorities and securing financing.
The Electricity Regulatory Authority presented its new organizational structure and strategic plans. Among the projects discussed was a proposed transition from liquid fuels to natural gas, which is currently supported by a feasibility study.
Social Spending Classification Discussed
A second meeting focused on social spending, with the participation of the Ministry of Finance’s budget, treasury and public debt directorates, the Basil Fuleihan Institute for Financial and Economic Studies, and the Ministry of Social Affairs.
The discussions addressed the need for a unified definition and classification of social expenditure, amid differences between broader and narrower approaches to what constitutes social spending.
Officials examined how these definitions could affect resource allocation and the financing of social expenditure, including funding through the state budget, loans and international contributions.
The meeting concluded with an agreement to prepare a unified table identifying and classifying social spending items. The aim is to establish consistent criteria across ministries and relevant public institutions.
Budget Reform
The mission also held a meeting on Wednesday evening to discuss reforming the preparation of the state budget, addressing government arrears, and improving the comprehensiveness and transparency of the budget.
Director General of Finance Georges Maaraoui said budget preparation reform is a priority for Finance Minister Yassine Jaber.
The ministry is working toward adopting a medium-term fiscal framework that would establish general expenditure ceilings and ceilings for individual ministries.
The Lebanese side explained that previous budgets were largely dominated by rigid expenditures, including salaries and debt servicing, leaving limited fiscal space for strategic policy priorities.
For the current year, the budget has begun allocating funds for housing loans and measures aimed at stimulating the real estate sector, with the ministry expecting greater fiscal space for strategic priorities in subsequent years.
Budget Transparency and External Financing
As part of efforts to improve budget comprehensiveness, the Ministry of Finance said it had, in coordination with the CDR, succeeded in recording payments for externally financed projects as part of budget execution after several years of work.
Discussions are also underway on including these payments in a dedicated annex to the 2028 draft budget.
The IMF mission is scheduled to conclude its visit to Lebanon with a meeting at the Ministry of Finance at 1:30 p.m. on September 18.
The meeting will bring together Finance Minister Yassine Jaber, Economy Minister Amer Bisat, representatives of the presidencies of the Republic and Council of Ministers, Banque du Liban Governor Karim Said, and the Lebanese and IMF negotiating teams led by Rigo.
