Fiscal Deficit Narrows to $111.66M in January

According to the Ministry of Finance, Lebanon’s fiscal deficit narrowed by 6.44% year-on-year (y-o-y) to reach $111.66M in January 2015. The fiscal deficit tightened following a 16.78% y-o-y slump in total expenditures to $989.99M, despite the 17.94% yearly drop in total revenues to $878.33M. As a matter of fact, the primary surplus, which excludes the government’s debt service, widened from $142.38M in January 2014 to $157.82M this year (or 0.33% of GDP).

Starting with budget revenues, tax receipts slightly slid by 0.30% y-o-y to $739.15M in January. We estimate that, “taxes on income, profit, capital gains” and taxes on property (which grasped about 43% of total tax receipts) went up by approximately 4.59% yearly, which was offset by the 1.73% and 4.47% yearly increases to $111.59M and $306.49M in customs revenues and VAT revenues (combined weight of 57% of total tax receipts), respectively. As for non-tax revenues, they dropped by 64.61% y-o-y to $72.81M, which is mainly attributed to the tightening of telecom revenues after the Ministry of Telecommunication reduced internet and mobile tariffs in Mid-May 2014. Treasury receipts amounted to $66.37M in January 2015, a 46.15% y-o-y decline from 2014.

On the expenditure front, transfers to EdL experienced an annual fall of 28.56% to $124.60M in January due to the 60% decline in international oil since June 2014. In contrast, while interest payments rose by 3.41% yearly to $257.32M. In details, interest payments on domestic debt registered a 5.45% y-o-y increase to $175.77M in the first month of the year, offsetting the slight 0.74% down tick to $81.55M in interest payments on foreign debt. In addition, Treasury expenditures fell by 11.10% y-o-y going from $111.16M in January 2014 to $98.82M in January 2015. 

Fiscal Performance in January  y-o-y ($M)

Fiscal Deficit Narrows to $111.66M in January

Source: Ministry of Finance

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