Lebanon’s Finance Ministry is finalizing spending and revenue projections to complete the 2025 draft budget by the end of this month, aiming to submit it to cabinet for approval before sending it to parliament within constitutional deadlines.

A senior financial official told Asharq Al-Awsat the plan foresees about $6 billion in expenditures and revenues – up roughly $1 billion from the current budget, which was passed by government decree after parliament missed its legislative window last year amid political turmoil and fallout from the autumn Israel war.

Officials say the draft seeks to avoid a fiscal deficit by raising both income and spending in equal measure, while generating a primary surplus.

The government plans to boost investment outlays and improve public sector pay without introducing new taxes, instead counting on better collection, curbing tax evasion, and tackling smuggling and the shadow economy, which deprive the treasury of an estimated $5 billion annually.

Extra revenue is also expected from widening the taxpayer base and tightening customs receipts with advanced scanners.

Still, in line with its “no spending without matching revenue” principle, the ministry is preparing to reinstate a suspended levy on fuel consumption, with proceeds earmarked for monthly allowances to serving retired military personnel, although the measure had been frozen by a State Shura Council ruling.

Despite the projected balance, the budget once again omits debt obligations, particularly Eurobond repayments, underscoring what legal and banking sources describe as persistent hesitation by the government and finance authorities to confront the sovereign debt crisis at the core of Lebanon’s six-year financial collapse.

The ministry is also working on a long-delayed financial recovery law to address the estimated $73 billion hole in the banking system, a figure expected to rise by another $11 billion in war-related losses.

Prime Minister Nawaf Salam’s ministerial committee has now received detailed central bank data to shape the legal and operational framework for tackling the debt, restructuring Banque du Liban’s balance sheet, and determining the state’s contribution.

Parallel to the budget, the Finance Ministry is drafting a medium-term fiscal framework through 2029 to guide structural reforms demanded by international lenders.

Finance Minister Yassin Jaber has asked ministries and public institutions to factor in growth forecasts, inflation, balance of payments trends, and exchange-rate policy, with the aim of coordinating fiscal plans with development strategies to spur recovery, job creation, and better living conditions.

But business leaders remain skeptical. Financial sources say frustration is mounting over the government’s slow pace in adopting a recovery strategy, prolonging uncertainty and delaying tough decisions on how to distribute losses among the state, central bank, lenders, and depositors.

The delay comes as Lebanon approaches spring parliamentary elections, after which the government must resign, likely pushing back key financial legislation further.

If passed, the recovery law would define which debts can be repaid and which are recognized as losses, alongside a burden-sharing plan across state institutions, the central bank, commercial banks, and depositors.

It would also unlock implementation of the banking sector restructuring law approved by parliament in July but suspended until the financial recovery framework is enacted.