ABSTRACT

Lebanon’s high debt-to-GDP ratio and persistent overall budget deficit expose the entire financial system to vulnerability. Unless the country generates enough revenue to meet its gross financing needs, the prospect of borrowing more remains strong. Given the complexity of the Lebanese economy and debt structure, the formulation of fiscal and monetary policy is difficult and costly. Hence, policymakers are continuously confronted with difficult choices and must select the choice that is the least destructive. The choice between short-term economic stability and medium-term fiscal sustainability is a clear example of the dilemmas that confront policymakers. In addition, procyclicality and its repercussions on economic growth and the lack of responses to fiscal needs are matters of significant importance for public debt and fiscal sustainability. Hence, this study provides an in-depth analysis of the difficulties facing the Lebanese economy as it tries to sustain its public debt and the overall fiscal deficit. The study calculates the cyclically adjusted balance to analyze the appropriateness of fiscal policy and to assess the role of the automatic stabilizers. Additionally, the study employs a multivariate vector autoregression to forecast the variables in the simple debt model and to identify the impulses needed from various endogenous shocks. The derived results demonstrate that fiscal policy is predominately procyclical, that policymakers risked short-term economic stability for the sake of medium-term fiscal sustainability, and that unless the government adjusts its fiscal behavior, triggers automatic stabilizers, and negotiates a better deal with resident lenders, the economy will further deteriorate.

摘要

黎巴嫩的债务与国内生产总值的高比率以及持续的总预算赤字使整个金融体系容易受到伤害。除非该国产生足够的收入来满足其总融资需求，否则借入更多贷款的前景仍然强劲。鉴于黎巴嫩经济和债务结构的复杂性，制定财政和货币政策既困难又昂贵。因此，决策者不断面临艰难的选择，必须选择破坏性最小的选择。在短期经济稳定和中期财政可持续性之间做出选择是政策制定者面临困境的一个明显例子。此外，顺周期性及其对经济增长的影响以及对财政需求缺乏反应是公共债务和财政可持续性的重要问题。因此，本研究对黎巴嫩经济在试图维持其公共债务和总体财政赤字方面面临的困难进行了深入分析。该研究计算了周期性调整后的余额，以分析财政政策的适当性并评估自动稳定器的作用。此外，该研究采用多元向量自回归来预测简单债务模型中的变量，并识别各种内生冲击所需的冲动。得出的结果表明，财政政策主要是周期性的，决策者为实现中期财政可持续性而冒着短期经济稳定的风险，并且除非政府调整其财政行为，触发自动稳定器并与居民协商更好的处理方法贷方，