Salameh has Gloomy Predictions on Lebanon's Economy over Salary Boost
إقرأ هذا الخبر بالعربية
Central Bank Governor Riyad Salameh has warned the government that inflation could reach 6 percent this year and expected a balance of payments deficit of 2 billion dollars by the end of September, An Nahar newspaper reported on Monday.
His warnings came after he was summoned to brief a cabinet session last Wednesday on the economic repercussions of proposed taxes to finance a new salary scale for the public sector.
Finance Minister Mohammed al-Safadi previously proposed raising taxes on illegal seaside properties, customer deposits, luxury items, alcohol, fiscal stamps and fees on construction permits to finance the pay hikes.
The wage boost will cost the state treasury around $1.2 billion as there are over 180,000 public sector employees including military personnel.
The SCC, a coalition of private and public school teachers and public sector employees, staged a nationwide strike last Thursday to protest the cabinet's failure to refer the controversial new salary scale to the parliament for approval.
According to the government's bill, the raise will be retroactive from July 1, 2012. But the cabinet is facing the controversy of imposing the right taxes to finance the boost after Salameh gave gloomy predictions on the country's struggling economy and monetary system.
According to An Nahar, the Central Bank governor warned that the balance of payments deficit could reach 2.6 billion dollars by the end of 2013 and feared a minimum one percent interest hike on the increase in credit.
Any one percent increase in debt service would mean a burden of 560 million dollars, a policy rejected by the International Monetary Fund and rating agencies, he said.
He also warned there will be negative growth next year and that the public debt and job opportunities were in danger, the newspaper said.
Salameh has proposed raising the wages in increments over three to five years to only ease the negative effects of the proposed taxes but not as a solution that would salvage the economy.
12 November 2012, 08:38
01
This is THE man of the situation. Ministers and Governments should closely follow his advices. Thank-you for doing a great job Mr Governor, moreover, thank-you for helping the MEA (and Mr Hout) and keeping it afloat by helping it grow despite the poor regional political and economical climate.
Thank-you.
12 November 2012, 12:25
00
This year has been a financial disaster to many of us... businessmen and consumers... What could be worst next year...? The country going bankrupt when it already is... We all know who we have to thank for all this crap... The so called M8 crowd and their cronies... who else?
12 November 2012, 17:13
00
MEA and beirut airport is crap......corruption...our airport is horrible comparing to other international airport....look at the shops inside and cafeteria....
12 November 2012, 17:28
00
What does he know we need a more competent replacement. OK repeat after me Gebran Bassil for Central Bank Governor who cares if he's as clueless about money matters, except comisynging, as he is about electricity and telecommunication!
12 November 2012, 19:10
00
M8 always boated they wanted to reform the state. so why still nothing is done? here you could find millions of dollars! by stopping the waste! no more scadalous privileges to the army persennel, no more lifetime salary for MPs, computerization of all the departments of the public services so they d stop corruption at all levels, recovering of the bills of electricity or cut the power supply,and and and....
but no one wants to reform the state as all of them benefit from its theft! just a bunch of irresponsible we have....
