Lebanese parliament approves law lifting banking secrecy
The Lebanese parliament has approved a law aimed at removing banking secrecy in the country, a key reform demanded by the International Monetary Fund for a $3 billion package to be delivered.
A majority of 87 MPs voted for the law, while 13 were against in the 128-member legislature. There is a 10-year retroactive clause in the law, meaning that it will apply to all accounts dating back to 2015.
For decades Lebanon had been known for its banking secrecy, which prevented banks from disclosing any information about their clients or their accounts to anyone. But while that secrecy was once seen as a tool to help the economy, in recent times it has been viewed as a cover for corrupt practices.
Former central bank governor Riad Salameh has been detained over charges of embezzling public funds. Nady Salameh, the son of Riad, is among close relatives of top officials accused of transferring money abroad and evading the withdrawal restrictions faced by most Lebanese.
The IMF deal entered into a staff-level agreement with the state in April 2022, but Lebanon was accused of dragging its feet in introducing the reforms required.
Economic reform
Lebanon's new leaders insist they are committed to the IMF programme but have sought to renegotiate it.
International donors have also made economic reform, which would include lifting baking secrecy, a key requirement for Lebanon to access the much-needed aid to rebuild the country after it suffered widespread devastation during Israel 's war with Hezbollah last year.
Lebanon's economy, already struggling at the time, experienced a severe downturn in 2019 that has been blamed on decades of financial mismanagement and corruption by the country's ruling classes.
The crisis has culminated in the depreciation of the local currency, falling by more than 95 per cent against the US dollar. It has also seen depositors locked out of their savings.
Hashtags

Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles


Arabian Post
12 hours ago
- Arabian Post
Ethiopia Targets 8.9 % Growth as Budget Widens
Ethiopia's finance minister has announced that the economy is projected to expand by 8.9 % in the fiscal year beginning 8 July 2025, alongside a modest increase in the budget deficit amid structural reforms. Finance Minister Ahmed Shide addressed parliament on Tuesday, outlining the forecast for the next fiscal year, citing an acceleration in real GDP growth from an estimated 8.4 % this year to 8.9 % next year. The state budget deficit is expected to rise slightly to 2.2 % of GDP, compared to 2.1 % in the current year. Total government expenditure is projected at 1.9 trillion birr, equivalent to around US $14 billion. This positive outlook is deeply anchored in ongoing reforms backed by an International Monetary Fund programme. These include the liberalisation of the exchange rate, debt restructuring negotiations, and the establishment of the Ethiopian Securities Exchange, which opened in January after a 50‑year absence. ADVERTISEMENT The cabinet's approval of the new budget earlier this month signalled a strategic reallocation of resources, with spending set to increase by 31 % compared to the previous year's 971 billion birr. A significant portion is earmarked for national security, productivity enhancement, and disaster relief, including continued subsidies for fuel, fertiliser, oil and medicines—a move aimed at dampening inflationary pressure on households. Reforms and their impacts The IMF programme that began in July 2024 has been a linchpin in the reform agenda. In April, State Finance Minister Eyob Tekalign reported that the third review of the four‑year US $3.4 billion loan arrangement had reached staff‑level agreement, with approval by the IMF executive board anticipated this month. Subsequent draws will hinge on continued reform progress, notably debt restructuring. Debt, inflation and exchange rate liberalisation remain pressing concerns. A draft budget revealed that 463 billion birr—nearly 39 % of recurrent expenditure—will go towards debt servicing, surpassing planned capital outlays. The government intends to restructure approximately US $3.5 billion in external liabilities through agreements in upcoming weeks. Bondholder writedowns are expected as part of a broader debt resolution strategy. Monetary reforms have lessened inflation, which reached 29.2 % in 2022/23, and narrowed the spread between official and parallel exchange rates. Foreign reserves have rebounded, tripling to US $3.6 billion, easing foreign exchange shortages. These financial indicators have been central in IMF assessments. Policy makers are awaiting formal debt restructuring talks this summer with official and private creditors alike, guided by the G20 Common Framework. Iran‑timed agreements with Chinese policy banks, the U.S. International Development Finance Corporation and other funders are being explored to support infrastructure and development needs. Regional comparisons and strategic outlook Ethiopia remains one of sub‑Saharan Africa's highest growth economies, although still below the pre‑covid annual average of around 10 %. The country's trajectory continues to be shaped by recovery from the Tigray war, covid‑19 disruptions, droughts and locust invasions, but ongoing reforms are expected to unlock further expansion. The imminent fiscal year budget, combining a steep rise in expenditure with a stabilising deficit, underscores a cautious but ambitious strategy: focusing on debt management, reform momentum and public service delivery, rather than unfettered spending. Key stakeholders, including opposition figures such as Desalegn Chane of the National Movement of Amhara, have voiced concern over rising tax burdens amid steady living costs and a depreciating birr. Criticism has targeted new levies on motor vehicles and excise taxes, with claims these conflict with subsidy policies. The finance minister, however, defended these as necessary for fiscal resilience and revenue expansion. Broader reform dynamics have been influenced by Prime Minister Abiy Ahmed's economic agenda, including the launch of Ethiopia's first stock market since the Haile Selassie era, currency liberalisation, and opening the banking sector to foreign investment. These steps have been deemed essential to securing up to US $27 billion in external funding from IMF, World Bank, UAE, China and others over the next four years. Looking ahead The projection of roughly 8.9 % GDP growth signals confidence that reforms are gaining traction, even as the government prepares to finance a wider budget and service rising debt. The success of the IMF programme's next review, debt restructuring outcomes, and reform implementation will determine whether Ethiopia can sustain its economic momentum and weather domestic and global headwinds.


Khaleej Times
17 hours ago
- Khaleej Times
World Bank raises UAE growth forecast for 2025 and 2026
The World Bank has raised its economic growth forecasts for the UAE for 2025 and 2026, citing robust expansion in both hydrocarbon and non-oil sectors. This growth is expected to offset the negative impact of weakening global demand and lower oil prices. According to the World Bank's latest Global Economic Prospects report, released on Tuesday, the UAE's GDP growth forecast for 2025 has been revised upwards by 0.6 percentage points to 4.6 per cent, while the 2026 forecast was increased by 0.8 percentage points to 4.9 per cent. The Bank also projects a 4.9 per cent economic expansion in 2027. Growth across the GCC region is also expected to accelerate, reaching 3.2 per cent in 2025, 4.5 per cent in 2026, and 4.8 per cent in 2027. 'The phase-out of Opec+ oil production cuts starting in April 2025 is expected to lead to higher oil output, despite anticipated lower oil prices driven by weak global demand. Growth will also continue to be supported by expanding non-oil sectors — particularly manufacturing, construction, and services — in economies including Bahrain, Kuwait, Oman, and the UAE,' the World Bank stated. In April, Opec+ surprised markets by announcing a larger-than-expected increase in oil output for May, despite weak prices and subdued demand. The group's decision to extend the 411,000 barrels-per-day production increase into June raised concerns about a potential global supply surplus. In a separate projection released earlier this year, the International Monetary Fund (IMF) estimated the UAE's GDP would grow by four per cent in 2025 and five per cent in 2026. Meanwhile, UAE Minister of Economy Abdullah bin Touq Al Marri stated that he expects the economy to grow by 5-6 per cent in 2025, fuelled by strong performance in key sectors such as technology, renewable energy, trade, financial services, and infrastructure. Slowing but no recession Globally, the World Bank warned that escalating trade tensions and policy uncertainty are expected to slow growth in 2025 to its weakest pace since 2008 – excluding official recessions. Growth forecasts have been revised downward for nearly 70 per cent of countries worldwide, across all regions and income levels. The Bank now expects global GDP to grow by just 2.3 per cent in 2025 – almost half a percentage point lower than earlier projections. 'A global recession is not expected,' the report said. 'However, if these forecasts hold, average global growth during the first seven years of the 2020s will be the slowest of any decade since the 1960s.' Indermit Gill, chief economist at the World Bank, noted a concerning long-term trend for developing countries. 'Outside of Asia, the developing world is becoming a development-free zone. Growth in developing economies has declined steadily – from six per cent annually in the 2000s, to five per cent in the 2010s, and now to under four per cent in the 2020s.' This downward trend parallels a decline in global trade growth, which has slowed from an average of five per cent in the 2000s to below three per cent in the current decade. Investment growth has also weakened, while global debt levels have surged to record highs. In 2025, growth is expected to decelerate in nearly 60 per cent of developing economies, with average growth projected at 3.8 per cent. This figure is forecast to rise slightly to 3.9 pe cent in 2026 and 2027 – still more than a full percentage point below the average growth seen during the 2010s. For low-income countries, the World Bank projects a 5.3 per cent growth rate in 2025, marking a 0.4 percentage point downgrade from previous forecasts. At the same time, higher tariffs and tight labor markets are pushing global inflation upwards, with prices expected to rise by an average of 2.9 per cent – remaining above pre-pandemic levels. Nonetheless, the World Bank notes that global growth could rebound more quickly if leading economies successfully reduce trade tensions and navigate policy challenges.


Khaleej Times
17 hours ago
- Khaleej Times
Pakistan boosts defence budget by 20% but slashes overall spending in 2025-26
Pakistan will raise defence spending by a steep 20% after a military clash with its old enemy India last month, but will slash overall federal expenditure for fiscal 2025-26 by a hefty 7% to 17.57 trillion rupees ($62 billion). The budget presented on Tuesday by Prime Minister Shehbaz Sharif's government allocated 2.55 trillion rupees ($9 billion) to defence in July-June 2025-26, up from 2.12 trillion. It projected a deficit of 3.9% of GDP against the 5.9% targeted for 2024-25. Inflation was projected at 7.5% and growth at 4.2%. The South Asian nation wants to kickstart growth while boosting its defences after the worst fighting with its neighbour in nearly three decades - which it has cast as a victory - and meeting the strictures of an International Monetary Fund finance programme. "After defeating India in a conventional war, now we have to surpass it in the economic field," Sharif said in a statement. Pakistan must also contend with the uncertainty of new import tariffs being imposed by the United States, its biggest export market. The clash with India was sparked in April by Islamists who killed 26 men in an attack on Hindu tourists in Indian Kashmir. Islamabad denied New Delhi's allegation that the militants were backed by Pakistan. Four days of fighting featured jets, missiles, drones and artillery. INDIA AND PAKISTAN BOTH BOOST MILITARY SPENDING For the coming year, Pakistan's government allocated 742 billion Pakistani rupees ($2.63 billion) to military pensions, taking the entire defence budget to 3.292 trillion Pakistani rupees ($11.67 billion). That included 704 billion Pakistani rupees ($2.5 billion) in spending on equipment and other physical assets. India's defence spending in its 2025–26 (April-March) fiscal year was set at $78.7 billion, up 9.5%, including pensions and $21 billion earmarked for equipment. It has indicated that it too will boost defence spending further. Sharif's government has projected 4.2% economic growth in 2025-26, saying it has steadied the economy, which looked at risk of defaulting on its debts as recently as 2023. Growth this fiscal year is likely to be 2.7%, against the budgeted target of 3.6%. Pakistan's growth lags far behind the region. In 2024, South Asian countries grew by an average of 5.8% and the Asian Development Bank expects 6.0% in 2025. Finance Minister Muhammad Aurangzeb said the government intended to complete the privatisation of Pakistan International Airlines, a request of the IMF. Growth should be aided by a sharp drop in the cost of borrowing, the government says, after a succession of interest rate cuts. But economists warn that monetary policy alone may not be enough, with fiscal constraints and IMF-mandated reforms still weighing on investment. Aurangzeb said that the budget was the start of a strategy to boost exports, increase foreign currency reserves to avoid the balance of payments crises of the past, and create a more competitive economy. "In short, our budget strategy is to change the economy's DNA by bringing basic changes," he said.