Proposed budget has $4.8 billion deficit. Salary scale to be included in the 2017 budget

The Ministry of Finance (MoF) has projected budget revenues of LL16,384 billion ($11 billion) for 2017 and expenditures of LL23,670 billion ($15.7 billion).

The MoF aims to reduce the fiscal deficit to $4.8 billion from the $4.9 billion recorded last year, which will lower the deficit to GDP ratio to 8.7 percent from 9.3 percent, said Finance Minister Ali Hassan Khalil.

The 2017 budget figures take into consideration an anticipated economic growth of two percent.

The overal...

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$1.2 billion invested in hospitality last year. Seven percent direct contribution to GDP

The direct contribution of travel and tourism to GDP in 2016 was seven percent, at $3.3 billion, according to the World Travel and Tourism Council (WTTC). The contribution reflects the economic activity generated by subsectors such as hotels, travel agents, airlines and other passenger transportation. The sector's turnover decreased eight percent compared to 2015.

Pierre Achkar, Chairman of the Syndicate of Hotels Owners, said: "Touristic institutions launched several offers and reduced ...

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265 companies from 28 countries submit proposals for solar energy. Local ones lead the way

The Ministry of Energy and Water has received 265 project proposals for its invite to the private sector to develop solar farms, operate them, and sell power to Electricité du Liban (EDL).

The ministry had sought the development of 180 megawatts (MW) of solar farms in all regions. The overall proposed capacities by interested bidders reached 3,500 MW.

Pierre Khoury, Chairman of the Lebanese Center for Energy Conservation, which is processing the proposals, said: "This shows ...

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Cabinet approves budget and sends it to Parliament. Details to be unveiled on Thursday

The Cabinet has approved the draft budget for 2017, which will substantially reduce the deficit. It will now move to Parliament for further deliberations and eventual ratifications.

The government has been operating without a public budget for 12 years. Successive draft plans sent by the Cabinet have lingered in an often gridlocked Parliament. The last one ratified by Parliament was in 2005.

The fiscal deficit widened to $4.94 billion in 2016.

The budget is heavily weighed...

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Subsidies for the food industry at international fairs.

The Cabinet has agreed to provide a subsidy to support the participation of industrial food companies in three international exhibitions: Gulf Food in the UAE which targets the MENA, the Fancy Food Show in New York held in June, and Anuga in Germany (October 2017).

The subsidy, which is valued at $330,000, was requested by the Investment and Development Authority in Lebanon (IDAL). The subsidy will cover the rental cost of 400 square meters (m2) at the Gulf Food exhibition, 100 m2 at the...

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Spending by Gulf tourists down 15 percent in ten years. More visitors from low-spending nationalities

Spending distribution for tourists from the KSA, the UAE, Kuwait, and Qatar reached 51 percent of the total number of tourist spending in 2009. This percentage lost 15 percentage points during the last ten years, registering the lowest percentage last year (36 percent), according to the Global Blue report: 'Ten Years in Review in Spending Behavior for Tourist from: Saudi Arabia, United Arab Emirates, Kuwait and Qatar.'

The report aims to explain the position of these market segments in te...

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National Accounts: GDP at $49.4 billion in 2015. Real growth rate 0.8 percent

GDP was calculated at $49.4 billion in 2015, up from $47.8 billion for 2014, according to the National Accounts 2004-2015 report published by the Central Administration for Statistics (CAS).

The figures are slightly lower than estimates by the International Monetary Fund (IMF): $50.8 billion for 2015, and $49.9 billion for 2014.

According to the CAS report, Real GDP growth continued to slow down over the 2012-2015 period. It fell from 2.8 percent in 2012, to 2.6 percent in 2013, ...

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Two more electricity barges proposed by Ministry of Energy. 1,000 MW power plants in Selaata and Zahrani needed

The Ministry of Energy and Water has put forth a new plan to increase power production starting this summer. The plan requires the approval of the Council of Ministers.

The plan proposes procuring the power production services of two more electricity barges with a capacity of 425 megawatts each.

"The barges will be sourced from the Turkish firm Karadeniz for a period of five years at a cost of 5.8 cents per kilowatt hour," an energy expert at the ministry said.

If approved,...

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Drinking water project for Bsharreh.

A loan agreement valued at $37 million was signed between the Kuwait Fund for Arab Economic Development (KFAED) and the Council for Development and Reconstruction (CDR) for the financing of the Potable and Irrigation Water Supply Project in Bsharreh.

The project aims to assure an adequate and constant potable water supply to meet Bsharreh's acute water shortage. It will include the construction of 11 tube wells with a total production capacity of about 10,000 cubic meters per day. It will...

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Meat imported from Brazil is safe.

Meat products imported from Brazil to the local market are safe to consume, Najib Wardini, commercial officer at the Embassy of Brazil, said.

A scandal erupted last week when Brazilian federal police raided a number of meat-producing plants after allegations that government inspectors allowed rotten and salmonella-tainted meat products to be exported in exchange for bribes.

There are 115 meat exporters registered at the Ministry of Agriculture (MoA), according to the embassy.
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16 agreements signed with Egypt. Joint committee formed to address certificates of origin

A joint business council held in Egypt signed 16 Memorandums of Understanding (MoUs) mainly related to the agricultural, industrial, and touristic fields.

Economy Minister Raed Khoury said: "We are ready to apply trade agreements flexibly. They are not sacred and can be adjusted to conform to the development needs of our relationship. But it's a good start."

The MoUs include agreements on management and civil service, veterinarian services, security, and participation in internatio...

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Lebanon joins European Bank for Reconstruction & Development.

The European Bank for Reconstruction and Development (EBRD) expects to start local operations in the second quarter of 2017. The move has been approved by Parliament.

"The necessary measures to open the bank's local office will be taken once the Parliament's decision is published in the Official Gazette," said a person familiar with the matter.

"Lebanon has become a shareholder in EBRD and its stake is the same size as that of similar states," the source said.

According to ...

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Equal gender opportunities in the job market says ILO. One third of women want to have a paid job and stay at home

Women have the same opportunities as men to find a good job, according to half the respondents of a survey published this month by the International Labour Organization (ILO). Around half –46 percent of female and 49 percent of male – believe that men and women with comparable qualifications enjoyed the same work opportunities. Around 34 percent of females and 33 percent of males said that women suffered worse opportunities, and 16 percent of both genders said that women have better opportunitie...

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$3 billion bonds issued to repay maturing debts. Oversubscribed six times

The Ministry of Finance (MoF) issued U.S. dollar denominated bonds worth $3 billion to repay foreign currency debt maturing throughout the year. The original objective was to raise $1.5 billion.

The bonds were divided into three tranches with maturities set at ten, 15, and 20 years

The issue was managed by four banks: Barclays, Byblos Bank, Societe Generale de Banque au Liban (SGBL), and JPMorgan.

Subscription bids from local and foreign banks and financial institutions hav...

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U.K. bans cabin laptops on flights out of Beirut. Follows similar U.S. measures

The U.K. has joined the U.S. in banning laptops and other electronic devices in airplane cabins on flights from Lebanon and several other Middle Eastern and North African (MENA) countries. The ban comes amid security concerns.

Inbound direct flights from Lebanon, Jordan, Egypt, Saudi Arabia, Tunisia, and Turkey will be affected by the ban.

Mobile telephones larger than what is considered to be 'normal-sized' mobiles or smartphones will also be forbidden.

Laptops, e-readers,...

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Israel to annex disputed gas-filled maritime area. Energy Minister: We will not back down

Israel is pushing a bill to annex 800 square kilometers of disputed maritime area. The bill needs the voting of the Israeli Government and the Knesset, Israel's legislative body.

Its decision came following years of failed negotiations mediated by the U.S and the United Nations between Lebanon and Israel.

Energy Minister Cesar Abi Khalil said: "Lebanon will follow through with its licensing round set for mid-September."

"Lebanon will not abandon its oil and gas rights found ...

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Industrial production reported at $8.8 billion. Industrial indicators launched

The Association of Lebanese Industrialists (ALI) has launched the Industrial Indicators, based on data collected from the Ministry of Finance. The indicators include number of establishments, workforce, local and exported sales, net revenues from the sector, raw materials, and net cost of industry.

According to the indicators, industrial production volume reached $8.8 billion in 2015, decreasing from $10.5 billion in 2012.

The number of industrial establishments reached 1,977 down...

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Ayman Hariri to sell his stake in BankMed. Closing the deal requires BDL's final approval

Ayman Rafic Hariri, the brother of the Prime Minister, has reached an agreement to sell his stake in BankMed to Cairo-based Jordanian businessman Alaa Al Khawaja, said Mohammed Hariri, the bank's Chairman. The Central Bank (BDL) has given its preliminary approval for the stake sale, he said.

The bank chairman refused to confirm what has been reported in some press reports that the 42.2 percent stake is valued at $535 million.

"It is still under discussion. The press reports about ...

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Three airlines to start flights to Beirut. Oman Air to stop operations this month

Aigle Azur, a French airline company, will start direct flights from Paris Orly to Beirut Rafic Hariri International Airport (BRHIA)on June 23.

Middle East Airlines (MEA), which has a code-sharing agreement with Air France, is the only carrier so far on the Paris-Beirut route.

A high-ranking source at the Civil Aviation Authority said: "Our agreement with the French side is to operate 21 weekly flights."

Air France has a maximum of 14 flights per week. There is a chance t...

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Ministry rejects banks $1 billion offer to avert interest tax hike. François Bassil denies proposal was made to the State

Banks have offered to pay the State $1 billion if it does not increase the tax on the interest earned from deposits, according to Minister of Finance Ali Hassan Khalil.

"The proposal was turned down by the Ministry of Finance (MoF)," he said.

François Bassil, former chairman of the Association of Banks and current Group Chairman of Byblos Bank, denied that such an offer was made to the State.

The current tax on the interest earned from bank deposits is five percent...

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Parliament hikes VAT to 11 percent. $300 million to Treasury, together with fiscal stamps

Parliament has approved increasing VAT to 11 percent from the present rate of ten percent. The increase forms part of a tax hike that aims to finance an expected rise in public sector employees' salaries.

The hike will boost VAT revenues ten percent. Calculated on 2016 VAT figures, this will add $215 million to the Treasury. It will increase prices to consumers by around one percent.

Fiscal stamp fees were increased from three per thousand to four per thousand, with the potential t...

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Retail activity continues to slip. Sales in six out of nine categories decreased in 2016

Retail sales fell one percent in 2016 compared to 2015, according to the Retail Sales Index by the Lebanese Franchise Association (LFA) and Chamber of Commerce, Industry, and Agriculture in Beirut and Mount Lebanon (CCIA-BML).

Albert Khoury, whose company prepared the statistics, said: "This confirms the fact that the retail activity's minimal rates of improvement witnessed in 2015 have failed to create recovery momentum in 2016."

The overall retail sales index for 2016 remained te...

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Kafalat guarantees up five percent.

Kafalat issued last year 712 guarantees for bank loans granted to small and medium-sized enterprises (SMEs). This represents an increase of five percent compared with 2015.

The value of loans benefiting from these guarantees amount to $93 million in 2016, the same figure as that of the previous year, according to data obtained from Kafalat.

"Last year was relatively more stable security-wise than 2015 which has encouraged more business people to apply for loans and guarantees," s...

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Horserace track to open in Zahleh. Will include restaurants, lakes

A horserace track is being planned for Haouch el Omoura in Zahleh. The project will include four food and beverage outlets. Investment is estimated at $4 million.

The project will be built on a 40,000 square meter (m2) plot, owned by three investors including Nicolas Nassif Maalouf, owner of Ammoury Holding, a real estate company.

The investors are in the process of preparing a study and will submit a license request to the municipality and the Office of Urban Planning. Constructi...

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Mutual funds no longer allowed to sell insurance policies.

The Ministry of Economy and Trade issued a decision that forbids mutual funds to sell insurance policies either directly or indirectly to the public. The decision will be carried out by the Insurance Control Commission (ICC).

Insurance companies are being competed against by mutual funds that are illegally offering different kinds of coverage. Mutual funds are legally only allowed to sell medical policies as a social service. But many have gone beyond this jurisdiction.

Unlike ins...

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Beirut awarded best city for food. Travel+Leisure magazine recognition for 2016

Travel+Leisure magazine and website (T+L) has recognized Beirut as 'The Best International Cities for Food.'

Melanie Lieberman wrote in T+L: "No matter where in the world you're traveling, you're going to eat. And if you plan to make that a very important part of your trip (which we suggest you do), consider heading to one of the world's best cities for food."

Every year for its World's Best Awards survey, T+L asks readers to weigh in on travel experiences around the globe – to sha...

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$13.5 million for two agriculture projects.

The Food and Agriculture Organization (FAO) in cooperation with the Ministry of Agriculture has launched two projects: One to develop agricultural vocational and technical education, and the second to create more job opportunities in the agriculture sector through investments in preparing land tracks and water reservoirs. The Netherlands Embassy has provided $13.5 million for the projects, which will be implemented within three years.

The ministry said that the project will improve the m...

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Fiscal deficit up to near $5 billion. Primary surplus almost zero

The fiscal deficit widened by close to $1 billion (25 percent) to reach $4.94 billion in 2016 compared to 2015. The increase is attributed to arrears paid to municipalities, as well as an escalating debt service.

The budget deficit widened by 24 percent to $3.67 billion, while the treasury deficit escalated by 30 percent to $1.28 billion, according to data released by the Ministry of Finance. The total primary surplus narrowed by 97 percent from $724 million to just $21 million.

On...

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Half the taxpayers earn below $10,000 annually. Informal work worsens income inequality

The lowest income earners among private sector regular employees (up to $10,000 annually) account for 57 percent of employees, and the highest two brackets (more than $40,000) account for six percent, according to 'Assessing Labor Income Inequality in Lebanon's Private Sector', a recent study conducted by the Ministry of Finance and United Nations Development Programme (UNDP).

Tax records of 369,279 declared employees represented a total income of $5.5 billion in 2014. The figure shows t...

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Banks to generate $1.2 billion in taxes. The levy on swap is enough to cover salary scale

The Association of Banks (ABL) said that banks will pay $850 million in corporate income tax generated by the swap operations carried out with the Central Bank (BDL) in 2016.

Banks were to pay $322 million in corporate income tax for the year 2016 on all operations, excluding the gains on swap operations. Bank shareholders will also pay a dividend tax of almost $56 million, bringing the total to be paid by banks and their shareholders to $1.23 billion.

ABL said the tax on the swap...

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Airport setting study to expand, includes terminal. MEA funds master plan

The Ministry of Public Works and Transport signed an agreement with the Middle East Airlines (MEA) and Dar al Handasah (Shair and Partners) to the launch the studies to expand Beirut Rafic Hariri International Airport.

The study, which costs $742,000, is funded by MEA through a grant. Dar al Handasah will be in charge of preparing the study.

Riad Mneimneh, General Manager of Dar al Handasah, said: "The study is for the modernization of the master plan which was put together by our...

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New Custom fees on selected imports. Tariffs up to 25 percent to protect dairy, poultry, plastic, paper, leather industries

The Ministry of Industry will impose Custom fees on some imported products soon, in order to protect the local dairy, poultry, plastic, paper, and leather industries.

Dany Gedeon, Director General at the Ministry of Industry, said: "The Ministry is studying on a case-by-case basis the percentage of fees that will be imposed on each product. Fees may go up to 25 percent."

Minister of Industry Hussein Hajj Hassan said: "The market is being flooded by products from neighboring countri...

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