Lebanon's Calculations Amid Energy Crisis in 2027 Budget
The article addresses the impact of the crisis in the Strait of Hormuz on Lebanon's 2027 budget, highlighting how prolonged shocks in oil and shipping prices can threaten the sustainability of the Lebanese economy. Despite the budget's projections of high revenues from taxes on goods and services, rising energy and shipping costs resulting from the crisis may dampen domestic demand and reduce the tax base, jeopardizing the expected revenue collection. The report also warns that a decline in tourism flows and foreign remittances, coupled with rising energy prices, will increase pressure on the budget. It emphasizes the importance of the government preparing for emergency scenarios by issuing an annex to the budget outlining the effects of oil price fluctuations and securing support mechanisms to counteract worsening conditions. Additionally, it calls for strengthening the independence of fiscal policies and improving reserve management to better handle external shocks.
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