Lebanon’s fiscal deficit expanded from $3.38B by November 2017 to $5.81B by November 2018 according to the records of the Ministry of Finance. This was attributed to a 21.8% yearly increase in government expenditures to hit $15.2B, outpacing the 4.5% annual rise in fiscal revenues to stand at $9.9B.
During the same period, the total primary balance displayed a deficit of $490.7M, compared to a $1.4B surplus recorded by November 2017.
The breakdown of revenues reveals Tax revenues (79.7% of total public revenues) increased by a yearly 4.5% to $7.9B by Nov. 2018. In turn, VAT revenues (grasping 30.4% share of tax receipts) rose by 11.1% y-o-y to $2.4B. The improvement in VAT revenues continues to be attributed to hiking the VAT rate to 11% from 10%, effective January 2018. Meanwhile, Custom revenues (15.6% of tax receipts) retreated by 5.22% to $1.2B over the same period. In turn, non-tax revenues (20.3% of total government revenues) rose by a yearly 10.1% to $2B by Nov.2018, owing to the yearly 29.1% rise registered in “telecom revenues” to stand at $921.3M over the same period.
On the expenditures front, total public spending recorded a yearly growth of 21.8% to hit $15.2B by Nov. 2018. Regarding transfers to Electricite du Liban (EDL), they surged from $1.1B by Nov 2017 to $1.6B by Nov. 2018 on the back of the continuous increase in average oil prices from $54/barrel by Nov. 2017 to $73/barrel by Nov. 2018. Moreover, total debt service reached $5.3B by Nov. 2018, up by a yearly 10.4%. In fact, interest payments on government debt went up by 10.8% to $5.1B, while the foreign debt principal repayment recorded an incremental uptick of 0.3% to reach $86.4M by Nov. 2018.
Yearly Fiscal Deficit by November (in $B)
Source: Ministry of finance