Lead:
Deputy Ibrahim Kanaan, chair of the Finance and Budget Committee, announced approval of two chapters of Lebanon's 2027 budget covering taxation, spending, loans, and credit transfers following a committee session on November 2. The vote advances fiscal planning amid a 45.9 percent contraction in value-added tax revenues during the first half of 2026, signaling weakened domestic consumption. Separately, minimum wage negotiations remain stalled after the government's one-month deadline expired without agreement between employers and the General Labour Union.
Details:
According to Al-Joumhouria, Kanaan stated the committee approved fiscal chapters but suspended other provisions pending government evaluation of proposed projects. The committee zeroed out program law allocations in the 2027 budget framework. Kanaan indicated the committee will continue examining program legislation in subsequent sessions, signaling ongoing budgetary deliberation.
Al-Akhbar reported that value-added tax collection on domestic transactions fell 45.9 percent in the second quarter of 2026 compared to the same period in 2025. The publication attributed the decline to regional conflict consequences, reduced visitor arrivals, weakened commercial and tourism activity, and post-war commodity price increases linked to global oil markets. While the figures indicate domestic consumption weakness, Al-Akhbar cautioned they do not necessarily reflect the full scale of economic contraction.
Separately, Al-Akhbar disclosed that minimum wage negotiations have reached an impasse. Labour Minister Mohammad Haidar granted a one-month negotiation window that concluded without accord. Employers declined all proposals despite implicit signals accepting a raise to $475, while the General Labour Union retreated from its $1,200 demand to under half that figure. Al-Akhbar noted the two sides remain unable to reconcile positions with their respective constituencies before finalizing agreement.
Watch For:
When the Finance Committee reconvenes to address suspended budget provisions and whether government project assessments alter committee positions on program spending allocations.
Whether minimum wage talks resume before year-end and at what threshold employers and labour unions ultimately settle, given the broad gap between current positions.
How successive quarter tax revenues track against Q2 2026 levels, indicating whether domestic consumption stabilizes or continues contracting under economic pressure.