Lebanon Businessnews News

Fiscal deficit jumps
Treasury expenditures triple
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The fiscal deficit grew to $3.9 billion in 2012, up by 67 percent from the previous year, according to the Ministry of Finance. The total fiscal deficit, which includes budget and treasury transactions, constituted around 30 percent of public spending for the year.

The primary balance, excluding debt servicing costs, posted a deficit of $0.11 billion, down from a surplus of $1.6 billion during the previous year. “This is the highest primary deficit posted since at least 2002,” former Minister of Finance Jihad Azour said. According to Azour, the deficit for the year was higher than the MoF’s published figures, standing at around $4.2 billion: “Spending on salaries and wages for the public sector, electricity production, and higher payments for the post-July 2006 war compensations (the Higher Relief Commission), as well as a number of other expenditures took a heavy toll on the treasury last year.”

Government expenditures grew by 15 percent to $13.3 billion. Treasury expenditures, which mainly include advances to ministries and public institutions, rose to $3.1 billion compared to $0.5 billion in the previous year. These expenditures included $2.2 billion for energy production through transfers to the Electricité du Liban (EDL), representing almost a 30 percent increase year-on-year. The cost of debt servicing and interest payments totaled $3.6 billion, slightly down from the previous year.

Revenues totaled $9.4 billion, remaining almost unchanged on a yearly basis. Total tax revenue grew to $6.7 billion, up by three percent year-on-year. Non-tax revenues totaled $2.1 billion, down by 4.7 percent.

The projected revenue transfers of the Ministry of Telecommunications (MoT), estimated at $1.4 billion, were included in calculating the public deficit. The MoT revenues have not been transferred to the Treasury yet.

Azour said the government should be more transparent and timely when disclosing public finance figures: “They should go back to the rules established almost a decade ago, which concern publishing the figures on time and explaining how the calculations are conducted transparently.”
Reported by Hanadi Chami
Date Posted: Mar 11, 2013
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