Fiscal deficit for H1 of 2015 showed a 33.29% year-on-year (y-o-y) expansion to $1.78B compared to the $1.34B deficit recorded H1 of last year. This was partially attributed to the 16.60% yearly decrease in revenues outpacing the 12.64% annual decline in expenditures, over the same period.
Notably, by June 2015, the total primary balance displayed a surplus to $475M compared to a higher primary surplus of $1.09B, in the same period of 2014.
Total government revenues stood at $4.79Bby June 2015, compared to a higher level of $5.74B by June 2014. On the tax inflows side, they declined by 16.60% yearly to $3.75B. In details, we estimate that, “taxes on income, profit, capital gains” and taxes on property (which grasped about 54.68% of total tax receipts) fell by approximately 11.88% y-o-y to 2.05B by June. In addition, VAT revenues (grasped 27.58% share of tax receipts) and custom revenues (grasped 17.74% share of tax receipts) dropped by respective yearly amounts of 25.33% and 11.32% to $1.03B and $665M, over the same period. In fact, these falls came about as customs from European imports were eliminated, the slowdown in the Lebanese economy became ever evident, and the deduction in oil prices. As for telecom revenues, the biggest share of non-tax income, went down from $742M by June 2014 to $550M in H1 2015 due to the tightening of telecom revenues after the Ministry of Telecommunication reduced internet and mobile tariffs in June 2014
Total government expenditures declined by an annual 12.64% to $5.94B in the first half of the year, compared to a higher level of $6.80B by June 2014. Regarding government’s expenditure, transfers to Electricite du Liban dropped by 46.76% annually to $628M, on the back of the approximate 45% fall in international oil prices from June of last year. Furthermore, interest payments on government’s debt went down 7.89% to $2.15B, due to interest on domestic and foreign debt declining yearly by 3.26% and 15.37% to $1.39B and $753M, respectively by June.
Yearly Fiscal and Primary Balances in H1 (In $M)
Source: Ministry of Finance