According to Ministry of Finance (MoF) latest figures, Lebanon’s fiscal balance (cash basis) increased by 133.56% from last year to register a surplus of $940.50M by October 2021 for the 7h month in a row reflecting the extent of contractionary policy taken by the State that is characterized by decrease in government spending coupled with a significant increase in revenues, mainly driven by an upsurge VAT revenues.
In more details, the government revenues (including treasuries) added 34.24% on yearly basis to stand at $10,705.85M by October 2021. On the counterpart, total expenditures (including treasuries) retreated yearly by 9.39% to $9,765.35M by October 2021. It is worth noting that the primary balance which excludes debt service posted a surplus of $2,613.40M, compared to a deficit of $645.25M during the same period last year.
Fiscal revenues recorded a yearly increase by 40.32% to stand at $9,940.66M. Tax revenues (constituting 80.68% of total revenues) added an annual 44.18% to $8,122.95M by October 2021. Revenues from VAT (29.50% of total tax receipts) added 147.32% y-o-y to $2,432.07.
As for Non-tax revenues (16.28% of total revenues), they increased from $1,450.66M by October 2020 to $1,817.71M by October 2021. Meanwhile, “Telecom revenues” added annually 30.37% to stand at $791.13M by the same period.
On the expenditures’ side, transfers to Electricity du Liban (EDL) decreased by 37.36% to reach $462.92M. Moreover, total debt servicing (including the interest payments and principal repayment) reached $1,540.53M by October 2021, down by a yearly 6.57% such that interest payments alone retreated by 6.99% y-o-y to 1,433.54M. In details, interest payments on domestic debt increased by 0.43% y-o-y to $1,399.45M. Meanwhile, interest payments on foreign debt registered a year-on-year significant drop by 76.93% to $34.09M.
In its turn, the treasury transactions (includes revenues and spending that are of temporary nature) posted a deficit of $132.37 by October 2021 compared to last year’s deficit of $507.92M.
Yearly Fiscal deficit by October (in $M)
Source: MoF, BLOMINVEST Bank