According to the Ministry of Finance, Lebanon’s fiscal deficit expanded from $907.59M by June 2017 to $3.04B by June 2018. In fact, fiscal revenues witnessed an annual decrease of 1.97% to reach $5.94B while the government spending rose by a yearly 28.84% to stand at $8.98B.
Lebanon’s overall primary balance which excludes Lebanon’s debt service posted a deficit of $155.41M, compared to a surplus of $1.63B by June 2017.
Tax revenues (constituting 76.91% of total revenues) declined by an annual 3.24% to $4.57B. Revenues from the VAT” (27.19% of total tax receipts) climbed by 9.71% year-on-year y-o-y to $1.24B, and this can be largely attributed to the new VAT rate of 11%, increased from 10% starting January 2018. Meanwhile, “customs’ revenues” (14.53% of tax receipts) dropped by 3.92% (y-o-y) to $663.74M. As for Non-tax revenues (22.88% of total revenues), they witnessed a drop of 16.93 % to stand at $860.26M by June 2018. This can be linked to the yearly decrease of 26.02% in “telecom revenues” (constituting 37.04% of total non-tax revenues) to reach $318.61M by June 2018.
On the expenditures’ side, total government spending increased by a yearly 28.84% to hit $8.98B by June 2018. In details, transfers to Electricity du Liban (EDL) alone rose by 32.76% to reach $738.44M which followed the 35.08% annual rise in average oil prices to $71.16/barrel over the period. Moreover, total debt service increased by an annual 13.58% to reach $2.88B by June 2018. In details, interest payments rose by a yearly 13.92% to stand at $2.78B by June 2018 while the foreign debt principal repayment recorded an uptick of an annual 3.52% to reach $97.77M by June 2018.
Yearly Fiscal Deficit by June (in $B)
Source: Ministry of finance