Lebanon’s Cabinet faces crunch decision on public sector pay raises

Report by Petra Abou Haidar, English adaptation by Karine Keuchkerian 

The government is set to decide at Monday’s Cabinet session whether to approve salary increases for public sector employees who have been demanding them for years to offset inflation and the losses they have suffered, based on studies conducted by Lebanon’s Finance Ministry.

After approving the budget last January without granting salary increases — despite protests near Parliament — the government requested time to study wage adjustments.

That deadline has expired, and the issue has returned to the Cabinet.

Sources told LBCI that the finance minister and his team will present three financial scenarios developed after meetings and studies with the central bank, the Civil Service Board, and the Defense and Interior ministries.

Each scenario includes a proposed increase, its estimated cost to the state, and suggested funding sources.

The Finance Ministry has declined to disclose the figures before they are discussed, but confirmed that the aim is to approve an increase before the end of the month. The final decision rests with the Cabinet.

The main reason for caution is the high cost. The number of public sector employees, both active and retired, is close to 330,000. Any increase of $100 per month per employee would amount to roughly $400 million annually — a significant figure for a budget already under strain.

The government says any unfunded increase would negatively affect everyone, either through new taxes and fees or through pressure on the Lebanese lira and rising inflation, which would quickly erode the value of the raise.

It therefore stresses, in coordination with the International Monetary Fund (IMF), the need to secure clear funding sources before taking any decision to preserve fiscal stability.

Meanwhile, public sector employees are awaiting the outcome of the Cabinet session and will link any action to the results of the discussions.