According to Ministry of Finance (MoF) latest figures, Lebanon’s fiscal deficit (cash basis) stood at $688.16M by January 2021, down from last year’s $670.40M.
In detail, the substantial deficit is attributed to the annual 50.86% drop in government revenues (including treasuries) which fell to $501.70M by January 2021. On the counterpart, total expenditures (including treasuries) retreated yearly by 29.65% to $1,189.86M by January 2021. It is worth noting that the primary balance which excludes debt service posted a deficit of $593.32M, compared to a deficit of $301.27M during the same period last year.
Fiscal revenues recorded a yearly drop by 50.63% to stand at $469.90M. Tax revenues (constituting 89.65% of total revenues) retreated by an annual 47.85% to $421.27M by January 2021. Revenues from VAT (21.49% of total tax receipts) dropped by 53.45% y-o-y to $100.99M. The drop in “VAT revenues” is most probably attributed to the deterioration of Lebanese purchasing power with the decrease in value of Lebanese pound, which obligated Lebanese people to rationalize their spending.
As forNon-tax revenues (10.33% of total revenues), they dropped from $143.92M by January 2020 to $48.63M by January 2021. Meanwhile, “Telecom revenues” dropped yearly by 100%.
On the expenditures’ side, transfers to Electricity du Liban (EDL) (2.7% of general expenditure) slid by 84.90% to reach $28.68M. Moreover, total debt servicing (including the interest payments and principal repayment) reached $260.75M by January 2021, down by a yearly 31.94% such that interest payments alone retreated by 23.29% y-o-y to $250.22M. In details, interest payments on domestic debt slumped by 13.72% y-o-y to $245.89M. Meanwhile, interest payments on foreign debt registered a year-on-year significant drop by 89.51% to $4.32M.
In its turn, the treasury transactions (includes revenues and spending that are of temporary nature) posted a surplus of $165.91M compared to a deficit $25.08M by January 2020.
Yearly Fiscal deficit by December (in $M)
