Lebanon’s budget gap widens 60% y/y to USD 3.3bn at end-September 2013

By bne IntelliNews December 2, 2013

Lebanon's budget gap (including Treasury transactions) widened 60% y/y to LBP 5tn (USD 3.3bn) in the first nine months of the year on falling revenue (both tax and non-tax) and rising spending, mainly on salaries and debt servicing, the finance ministry said in a statement. The budget deficit will likely reach LBP 5.5tn by end-2013 and might expand further in 2014 if no measures were taken to boost revenue, according to caretaker finance minister Mohammed Safadi.

The deficit equalled 31.9% of total spending in January-September, up from 22.3% the previous year.

Total budget proceeds dropped 2.2% y/y to LBP 10.6tn, whereas spending rose 11.6% to LBP 15.6tn. The budget recorded a LBP 824bn primary deficit over the period compared with a LBP 978.6tn primary surplus the year before.

Tax proceeds fell 1.5% y/y to LBP 7.8tn mainly on lower VAT and custom fees. The latter shrank 3.5% y/y to LBP 1.62tn in January-September on falling energy imports. A weak tourism activity and related consumption have also weighed on VAT receipts that edged up just 0.1% y/y to LBP 2.48tn over the period.

Non-tax proceeds fell 10.8% y/y to LBP 2.2tn mainly on shrinking telecom receipts and subdued real estate deals. Telecom receipts shrank 15.2% to LBP 1.4tn in January-September.

Debt servicing rose 1.5% y/y to LBP 3.9tn over the period on higher interest payments on foreign debt (up 6.4% y/y to LBP 1.49tn). Interest on the domestic debt fell 1.3% y/y to LBP 2.44tn. Transfers to loss-making Electircite du Liban (EDL) dropped 3% y/y to LBP 2.54tn on lower fuel prices.

Related Articles

‘Fruit juice moment’ indicates Iran making serious trade incursions in blockaded Qatar

An image of a ‘Produced in Iran’ fruit juice brand aboard a Qatar Airways flight might not appear at all exciting but to Iranians discussing the trade opportunities generated for the Islamic ... more

Dubai’s ICD reportedly interested in Montenegro’s Tivat airport

Investment Corporation of Dubai (ICD), which acquired a controlling stake in Porto Montenegro last year, reportedly is interested in ... more

Lebanon becomes European Bank for Reconstruction and Development shareholder

Lebanon has become the fifth member country from the Southern and Eastern Mediterranean (SEMED) region to join the European Bank for Reconstruction and Development (EBRD), becoming a shareholder with ... more