It added that policy decisions, such as a VAT exemption on gasoline and a cost of living adjustment for public sector employees, had also contributed to the rising deficit.
The IMF called for salary scale adjustments to be contained with no retroactive payments as demanded by government workers and public school teachers currently on strike.Political jockeying and sectarian tensions had slowed or stalled action needed to tackle
The lack of reforms amplified macroeconomic imbalances, and the fiscal position, in particular, has worsened, with adverse consequences for public debt, it added.
The IMF issued a series of recommendations following a visit to
"The last officially approved budget dates back to 2005. A sound budget – covering all government expenditure and revenue plans – would crystallize the government's policy intentions and restore credibility in fiscal policy," it said.
The IMF advised as well the immediate introduction of reforms in the electricity sector including plans to strengthen generation capacity, switch to natural gas and lower tariffs.
Such reforms should be complemented by improvements in transmission and distribution, it said.
It also recommended taking other measures for preserving financial stability such as maintaining large liquidity and strengthening capital buffers by banks.
"Banks have been largely resilient despite the difficult environment. Regional instability has halted their expansion in neighboring countries and opportunities for credit for the private sector are currently limited. Non-performing loans have marginally increased and profitability ratios have declined," the IMF's report said.
It continued: "Still, liquidity buffers remain large and the quality of capital is high.
"This is due to a dramatic increase in the labor supply from the Syrian refugee influx that has revealed underlying weaknesses in
Most Popular Stories
- National Retail Federation Reduces Sales Forecast
- Long-term Strengths Emerge in U.S. Economy
- Xavier Gutierrez Appointed to Bank Board
- Honda' s Accord Plug-in Hybrid Is a Fuel Miser
- Naya Rivera and Ryan Dorsey Are Married
- Amazon Fire Phone Improves on Familiar: Review
- Self-Induced Abortions Rise After Texas Closes Clinics
- Weekly Jobless Claims Drop to Lowest Level in 8 Years
- Marco Rubio Swings Back to the Right
- Comic-Con Festival Kicks Off in San Diego