Lebanon PM targets deficit of 7% of GDP next year amid ‘economic emergency’

Lebanese Prime Minister Saad Al-Hariri is seen during the meeting to discuss a draft policy statement at the governmental palace in Beirut, Lebanon February 6, 2019. (Reuters)
Updated 05 September 2019

Lebanon PM targets deficit of 7% of GDP next year amid ‘economic emergency’

  • Lebanon also plans to keep the local currency peg to the dollar, Saad Hariri says
  • Lebanon has one of the world’s largest public debt burdens at 150 percent of GDP

BEIRUT: Lebanese Prime Minister Saad Al-Hariri said his government would aim to cut the budget deficit to 7 percent of GDP next year as part of reforms to shore up state finances and rein in public debt.
Lebanon also plans to keep the local currency peg to the dollar which was crucial to move ahead with reforms, Hariri told CNBC in an interview.
“So what we are doing is, fixing our debt to GDP, our deficit and the budget to 7.6 percent this year, we want to go down to 7 percent next year, or maybe a little bit less,” he said in the interview aired on Wednesday.
The prime minister also said that “keeping the Lebanese pound at 1,500” is the only stable way to proceed with the government’s reforms.
Hariri said his country would not consider an International Monetary Fund (IMF) program since it would leave market forces to decide the pricing of the country’s currency.
“I think the IMF has certain criteria that we do not, especially when it comes to the Lebanese pound. This is something that we feel extremely sensitive about.”
The IMF said in July the deficit in 2019 would likely be well above the government’s target of 7.6 percent of national output.
Lebanon has one of the world’s largest public debt burdens at 150 percent of GDP.
On Monday, Lebanon declared a “state of economic emergency,” with Hariri saying the government would take emergency measures to speed up economic reforms to help overcome a worsening economic crisis.
Fitch downgraded Lebanon’s credit rating to CCC on debt-servicing concerns 10 days ago.


Big oil feels the heat on climate as industry leader promises: ‘We will be different’

Updated 22 January 2020

Big oil feels the heat on climate as industry leader promises: ‘We will be different’

  • Trump singles out ‘prophets of doom’ for attack
  • Greenpeace told the Davos gathering that the world’s largest banks, funds and insurance companies had invested $1.4 trillion in fossil fuel companies since the Paris climate deal

LONDON: Teenage environmental activist Greta Thunberg slammed inaction over climate change as the global oil industry found itself under intense scrutiny on the opening day of the World Economic Forum in Davos.

The teenage campaigner went head to head with US President Donald Trump, who dismissed climate “prophets of doom” in his speech.
She in turn shrugged off the US president’s pledge to join the economic forum’s initiative to plant 1 trillion trees to help capture carbon dioxide.
“Planting trees is good, of course, but it’s nowhere near enough,” Thunberg said. “It cannot replace mitigation. We need to start listening to the science and treat this crisis with the importance it deserves,” the 17-year-old said.
The 50th meeting of the World Economic Forum was dominated by the global threat posed by climate change and the carbon economy.
The environmental focus of Davos 2020 caps a year when carbon emissions from fossil fuels hit a record high, and the devastating effects of bushfires in Australia and other climate disasters dominated the news.
Oil company executives from the Gulf and elsewhere are in the spotlight at this year’s Davos meeting as they come under increased pressure to demonstrate how they are reducing their carbon footprint.
“We are not only fighting for our industry’s life but fighting for people to understand the things that we are doing,” said Vicki Hollub, CEO of Occidental, the US-based oil giant with extensive oil operations in the Gulf. “As an industry when we could be different — we will be different.”

‘Planting trees is good, but nowhere near enough,’ activist Greta Thunberg told Davos. (Shutterstock)

She said the company was getting close to being able to sequester significant volumes of CO2 in the US Permian Basin, the heartland of the American shale oil industry which is increasingly in competition with the conventional oil producers of the Arabian Gulf.
“The Permian Basin has the capacity to store 150 gigatons of CO2. That would be 28 years of emissions in the US. That’s the prize for us and that’s the opportunity. People say if you’re sequestering in an oil reservoir then you are producing more oil, but the reality is that it takes more CO2 to inject into a reservoir than the barrel of oil that it makes come out,” Hollub said.
The challenge Occidental and other oil companies face is to make investors understand what is happening in this area of carbon sequesteration, she added.
The investment community at Davos is also looking hard at the oil industry in the face of mounting investor concerns.
Greenpeace told the Davos gathering that the world’s largest banks, funds and insurance companies had invested $1.4 trillion in fossil fuel companies since the Paris climate deal. It accused some of these groups of failing to live up to the World Economic Forum goal of “improving the state of the world.”