LEBANON - Lebanon’s economy is expected to contract by about 6.4% this year after recording 4.2% growth last year, Prime Minister Nawaf Salam said, as higher fuel and import costs continue to weigh on households and businesses.
Economic Recovery Reversed
PM Salam said last year’s growth marked the beginning of an economic recovery and an opportunity to build on improving conditions. However, the conflict disrupted that trajectory and pushed the economy back into contraction.
Lebanon’s heavy reliance on imports has increased the impact of higher international energy and transportation costs, particularly for diesel and gasoline. He said rising fuel prices have contributed to higher living costs and increased generator subscription bills for households.
He said reducing the burden on consumers should remain a priority, particularly when lower import and transportation costs can translate into lower prices for goods and services.
Generator Costs and Consumer Protection
The government has instructed authorities to strengthen oversight of private generators and ensure compliance with official tariffs and electricity-meter requirements.
Violations are to be documented and referred to the judiciary, according to PM Salam, as authorities seek to prevent consumers from being charged above regulated rates.
The measures come as households continue to face difficult choices between fuel expenses and other essential household needs.
Public Sector Pay and Social Support
PM Salam also outlined measures targeting public-sector employees, military personnel and teachers. The government has approved six additional salaries, increased family allowances, adjusted transportation allowances and raised the minimum wage.
He stressed that higher spending should be matched by available financing to preserve fiscal stability.
The draft 2027 budget is expected to reach about $7 billion, with roughly $1.2 billion of the increase allocated to salary adjustments.
The government also plans to increase its contribution to the Aman social assistance program to $70 million. Combined with expected World Bank financing, the increase could expand coverage from about 100,000 to 150,000 households.
Budget and Revenue Measures
PM Salam said public revenue collection has improved and that the 2027 budget does not introduce new taxes.
Some existing fees have been adjusted to reflect current exchange rates, while new fees have been introduced for yachts and private aircraft.
Higher Health Spending
Health spending is also set to increase, with allocations to the Ministry of Public Health rising by about 16% compared with this year.
The additional funding is intended to strengthen coverage for hospitalization, medicines and healthcare services.
PM Salam said social and health services should remain accessible to citizens regardless of their geographic location.
He also pointed to ongoing public works, including road paving and rehabilitation and bridge repairs, saying residents have begun to see improvements in several areas.
