According to Lebanon’s Ministry of Finance (MoF), personnel costs rose by an annual 2.92% to reach $3.28B by June 2019 compared to the same period last year. In fact, the eminent growth in personnel costs was driven by the increase in “End of service indemnities” and “Retirement salaries payments” while payments related to “salaries, wages and social benefits” recorded a yearly drop.
In details, payments for the sub-account of “Salaries, wages, and related benefits” (grasping 57.39% of the total personnel costs) witnessed an important decline by 8.90% year-on-year (y-o-y) to reach $1.88B by June 2019. This decline is mainly attributed to the y-o-y drop in “allowances for military personnel” and “other payments related to salaries” by 50.74% and 26.99% to reach $175.79M and $78.94M, respectively in H1 2019. However, basic salaries to “Military personnel” as well as the “Education personnel” recorded annual upticks of 1.28% and 5.77% to reach $998.34M and $364.84M, respectively.
In addition, payments for the sub-account of “Retirement salaries payments” (grasping 26.33% of the total personnel costs) rose by 18.81% year-on-year (y-o-y) to reach $863M by June 2019. As for “End of service indemnities” (11.96% of the total), it recorded a significant yearly increase to reach $392.04M compared to $248M in the same period last year. The rise can be linked to the implementation of the new salary scale, which encouraged many public employees to opt for an early retirement plan.
Overall, Personnel costs constituted 73.4% of current primary expenditures in the first half of 2019, compared to 67.7%, in the same period of 2018. However, Personnel costs represented 40.1% of total expenditures by June 2019, compared to 35.5% in H1 2018, respectively.
The Lebanese government is currently working on strict austerity measures in the 2020 state budget in order to reduce the budget deficit.
Breakdown of Salaries, Wages and Related Benefits in H1 2019 (LBP B)
| Basic Salaries | Total | |||
| 2018 | 2019 | 2018 | 2019 | |
| Military Personnel | 1486 | 1,505.00 | 2,075.00 | 1,826.00 |
| Education Personnel | 520 | 550.00 | 560.00 | 581.00 |
| Civilian Personnel | 260 | 252.00 | 328.0 | 303.00 |
| Government contribution to employees cooperative | N/A | N/A | 119.00 | 95.00 |
| Customs Salaries | N/A | N/A | 32.00 | 30.00 |
| Unclassified | N/A | N/A | – | |
| Total | 2266 | 2307 | 3,114 | 2,835 |
Source: MoF