According to Lebanon’s Ministry of Finance (MoF), personnel costs decreased by an annual 2.95% to reach $2.69B by May 2020 compared to the same period last year. The eminent decline in personnel costs was driven by a 63.53% fall in “End of service indemnities”. Meanwhile payments related to “Salaries, wages and social benefits” and “Retirement salaries payments” recorded an increase of 3.54% and 8.68% respectively in the first five months of the year.
In details, payments for the sub-account of “Salaries, wages, and related benefits” (constituting 61.32% of the total personnel costs) rose by 3.5% year-on-year (y-o-y) to reach $1.65B by May 2020. This rise is mainly attributed to the y-o-y increase in “allowances for military personnel” by 38.55% to reach $66.33M by May 2020. However, basic salaries to “Military personnel” as well as the “Education personnel” recorded an annual decrease of 1% and 12.85% to reach $824.54M and $252.07M, respectively.
In addition, payments for the sub-account of “Retirement salaries payments” (grasping 29.05% of the total personnel costs) rose by 8.68% year-on-year (y-o-y) to reach $780.76M by May 2020. As for “End of service indemnities” (4.69% of the total), it recorded a significant yearly decrease by 63.6% to reach $126.04M by May 2020.
Personnel cost contributed to 74.9% of current primary expenditures (excluding interest payments) by May 2019 before dropping down to 70.7% by May 2020. The reason behind this drop lies in a larger expenditure base with a 2.8% year-on-year uptick by May 2020, mainly driven by higher payments for hospitals and medicaments by $127.36M and $39.12M respectively. However, Personnel costs represented 46.5% of total expenditures by May 2020, compared to 40.4% in May 2019, respectively.