Public Personnel Costs down by 5.3% y-o-y to $548.59M on January 2021

According to Lebanon’s Ministry of Finance (MoF), personnel costs decreased annually 5.3% to reach $548.59M on the official rate 1507.5 and $50.12M on the parallel rate (16,500 LBP/USD) on January 2021. This decrease was driven by the large drop of “end of service indemnities” by 95.9% reaching a total of $37M by January 2021. The large drop of the end of service indemnities can be explained by the fact that employees are not encouraged to get payed the end of service due to the devaluation of Lebanese lira, as they are waiting for a potential salary correction in the near future. However, this decrease was slightly counterbalanced by a year-on-year increase in “Retirement compensations” and “Salaries, wages and social benefits” and “transfer to public institutions to cover salaries” by 2.1%, 1.8% and 27.5% respectively, compared to January 2020. We expect a further increase these payments as the President Michel Aoun signed Decree No. 8318, of September 8, 2021, to amend daily transportation for employees of the private sector. Fees will become 24000 Lebanese Pounds per day rather than 8000 Lebanese Pounds.

In details, payments for the sub-account of “salaries, wages, and related benefits” (constituting 67.59% of the total personnel costs) slightly decreased by 0.18% year-on-year (y-o-y) to reach $370.81 by January 2021. This rise was mainly attributed to the y-o-y increase in “allowances and “Employment benefits” for military personnel by 53.77% and 40% to reach $108.12M and $9.28M respectively, by January 2021. However, these increases were partly offset by y-o-y decrease of salaries, wages and related benefits paid to education personnel by 21.11% to reach $47.09M.

Personnel costs represented 68.1% of primary expenditures in January 2021. Additionally, personnel costs represented 46.1% of total expenditures by January 2021, compared to 34.2% in January 2020. The main reason behind the change in the share of personnel cost as shares of total expenditures lies in substantial changes in the expenditure base registering a large year-on-year hike of 37% during January 2020, compared to a large drop of 29.6% during January 2021.


 Personnel Cost Breakdown by January (in $M)

Public Personnel Costs down by 5.3% y-o-y to $548.59M on January 2021

Leave a Reply

Your email address will not be published. Required fields are marked *