According to the Ministry of Finance, Lebanon’s fiscal deficit expanded from $2B by September 2017 to $4.50B by September 2018. In fact, fiscal revenues witnessed an annual increase of 3.16% to reach $8.67B while the government spending (including treasury transactions)[1] rose by a yearly 26.16% to stand at $13.18B.
Lebanon’s overall primary balance which excludes Lebanon’s debt service posted a deficit of $590.89M, compared to a surplus of $1.63B by September 2017.
Tax revenues (constituting 81.60% of total revenues) increased by an annual 1.97% to $6.55B. Revenues from the VAT” (28.91% of total tax receipts) climbed by 11.37% year-on-year (y-o-y) to $1.89B, and this can be largely attributed to the new VAT rate of 11%, increased from 10% starting January 2018. Meanwhile, “customs’ revenues” (15.52% of tax receipts) dropped by 4.20% (y-o-y) to $1.01B. As for Non-tax revenues (18.40% of total revenues), they grew by 4.51% to stand at $1.48B by September 2018. This can be linked to the yearly increase of 22.73% in “telecom revenues” (constituting 44.13% of total non-tax revenues) to reach $651.28M by September.
On the expenditures’ side, total government spending increased by a yearly 24.25% to hit $11.98B by September 2018. In details, transfers to Electricity du Liban (EDL) alone rose by 37.87% to reach $1.24B which followed the 38.52% annual rise in average oil prices to $72.73/barrel over the period. Moreover, total debt service increased by an annual 7.83% to reach $3.92B by September 2018. In details, interest payments rose by a yearly 8.09% to stand at $3.79B by September 2018 while the foreign debt principal repayment recorded an uptick of an annual 1.01% to reach $130.44M by September 2018.
Yearly Fiscal Deficit by September (in $B)
Source: Ministry of finance