Lebanon budget deficit continues to grow (from 18.48% in 2012 to 28.96% in the same period)

 BEIRUT: Lebanon’s budget deficit in the first eight months of 2013 soared to 28.96 percent of spending compared to 18.48 percent in the same period of 2012, the Finance Ministry said Wednesday.

According to the ministry, the deficit reached LL3.952 trillion ($2.63 billion) through August of this year compared to LL2.245 trillion in the same period of last year.

The primary surplus in the reporting period fell by LL1.615 trillion to record a deficit of LL428 billion.

In the first eight months of 2012, the primary surplus recorded a surplus of LL1.187 trillion, or 9.77 percent of total government spending.

Total government revenues reached LL9.695 trillion compared to LL9.904 trillion in the same period of last year, a decrease of only 2.11 percent.

For the fourth month running, the revenues collected by the Telecoms Ministry fell. The statement said that the ministry’s share from the telecoms revenues fell by 15.9 percent to reach LL1.208 trillion.

All tax and non tax revenues fell both in the first eight months and in the month of August alone.

On the expenditure side, total government spending up to August reached LL13.647 trillion compared to LL12.149 trillion last year, an increase of 12.33 percent.

Excluding the cost of debt servicing, total government spending reached LL10.124 compared to LL8.717 trillion in the same period of 2012.

Caretaker Finance Minister Mohammad Safadi attributes the surge in spending to the salary increase for government employees.

Safadi warned that if the salary scale were fully implemented in 2014 then the budget deficit would exceed 30 percent even if new taxes were introduced.