Lebanon's budget gap shrinks 90% y/y to USD 17.7mn in Jan 2013

By bne IntelliNews April 29, 2013

Lebanon's budget gap narrowed 90% y/y to just LBP 26.8bn (USD 17.7mn) in January due to an expected sharp drop in spending and a mild revenue growth, the finance ministry said. Lower transfers to the loss-making Electricite du Liban (EDL) due to favourable weather conditions and higher income and corporate tax collections in the beginning of the year also helped cut the budget gap. The January reading, thus, is not a trend-setter and the budget gap will likely widen sharply in H1.

Total revenue rose 2.4% y/y to LBP 1.542tn and spending fell 11.4% to LBP 1.569tn. The primary budget surplus jumped 508% y/y to LBP 302.1bn in January. The tax income grew 5% to LBP 1.19tn, lifted mainly by higher customs proceeds which climbed 9.4% to LBP 197.3bn in January as domestic demand remains strong. But sluggish tourism activity cut VAT receipts by 1.5% to LBP 458.1bn. A weak real estate activity also reduced non-tax income by 19% y/y to LBP 241.7bn over the month. Telecom proceeds also dropped 9% to LBP 157.8bn. The latter are registered in the January budget statement but in reality they were not transferred to the Treasury, the ministry said.

Debt servicing grew 10% y/y to LBP 309.1bn during the month due to higher domestic debt burden which increased 17% to LBP 236.3bn. Foreign debt servicing fell 7% to LBP 72.8bn.

Caretaker finance minister Mohammed Safadi already submitted an updated 2013 state budget supposedly reducing spending by LBP 2tn to LBP 21.23tn but upped the forecast budget gap for 2013 to LBP 5.247tn (USD 3.48bn) likely due to lower revenue expectation. 

Related Articles

Trump warns US pullout from "horrible" Iran nuclear deal might still be ahead

US President Donald Trump on October 16 warned that the termination of the Iran nuclear deal is still a clear possibility even though he ... more

Pentagon chief suggests staying in Iran nuclear deal is in US interests

US Defence Secretary Jim Mattis on October 3 told the Senate Armed Services Committee that it currently appears to be in the strategic interest of Washington to remain in the Iran nuclear deal. ... more

Iran will in six years accept stricter nuclear inspections if US behaves, says foreign minister

Iran’s foreign minister has said the country is willing to formally accept a tougher nuclear inspection regime in six years. However, Mohammad Javad Zarif continued to rule out any renegotiation of ... more