Figures released by the Ministry of Finance show that the fiscal deficit reached $3bn in the first half of 2018 compared to a deficit of $907.6m in the same period of 2017. The deficit was equivalent to 33.8% of total budget and Treasury expenditures compared to 13% of spending in the same period last year. Government expenditures reached $9bn and grew by 28.8% from the first half of 2017, while revenues regressed by 2% year-on-year to $6bn. As such, the widening of the deficit reflects a rise of $2bn in overall expenditures and a decrease of $119.1m in total revenues in the covered period. The growth in spending is due to an increase of $1.3bn in general budgetary expenditures, an expansion of $343.4m in debt servicing cost, and a rise of $341m in transfers to municipalities in the covered period.

On the revenues side, tax receipts declined by 3.2% year-on-year to $4.6bn in the first half of 2018, of which 27.2%, or $1.2bn, were in VAT receipts that increased by 9.7% year-on-year. Tax receipts accounted for 84.2% of budgetary revenues and for 76.9% of total Treasury and budgetary receipts. Further, non-tax budgetary receipts decreased by 17% year-on-year to $860.3m. They mainly included $442.3m in revenues generated from government properties that fell by 33.2% year-on-year, as well as $317m in receipts generated from administrative fees and charges that grew by 5.3% year-on-year. Receipts from telecommunication services dropped by 26.1% to $318.3m. They accounted for 72% of income from government properties and for 37% of non-tax budgetary revenues in the covered period. The Finance Ministry did not disclose the reason for the decline in telecom receipts.

On the expenditures side, total budgetary expenditures, which include general expenditures and debt servicing, increased by 25.7% to $8bn in the first half of 2018. General spending expanded by 33.7% year-on-year to $5.2bn, and included $1bn in outlays from previous years that rose by 31.3% year-on-year and $738.4m in transfers to Electricité du Liban that grew by 32.8% annually, among other general spending items. Also, debt servicing totaled $2.9bn in the first half of 2018 and increased by 13.5% from the same period of 2017. Debt servicing accounted for 32.1% of total expenditures and for 35.6% of budgetary spending, while it absorbed 48.5% of overall revenues and 53.1% of budgetary receipts. Further, Treasury transfers surged by 66.7% to $884.4m in the covered period, as transfers to municipalities grew from $102.2m in the first half of 2017 to $443.2m in the same period of this year. The primary budget balance posted a surplus of $217.4m in the first half of 2018, or 2.7% of budgetary expenditures, while the overall primary balance posted a deficit of $155.4m, or 1.7% of spending.