Budget deficit at end-June

Telecoms Revenues cause controversy in budget counts

The cumulative budget deficit for the first six months of the year reached LL1,304 billion ($869 million), dropping by LL65 billion ($43 million) from the deficit recorded for the corresponding period of 2010, the Ministry of Finance said.

The deficit till June 2011 amounted to 15.36 percent of total spending.

The primary surplus, excluding the cost of debt servicing, was LL1,700 billion ($1.13 billion) during the first six months of the year, rising by $36 million from the same period in 2010, the ministry said.

Figures released by the Ministry of Finance showed that the total revenues till June 2011 were LL7,180 billion ($4.78 billion), a LL639 billion ($426 million) rise compared to the corresponding period a year earlier.

Revenues from the Telecoms sector totaling LL1061 billion ($707 million) were added to the revenues of June 2011 though they still haven’t been transferred to the treasury. During the first half of 2010, only LL331 billion ($220 million) of Telecom revenues were transferred to the treasury.

Former Finance Minister Raya Hassan issued a statement objecting the comparison of the end-June budget with that of the first half of 2010. She said that the comparison was inequitable because the Telecom revenues for the same period last year were not calculated within the revenues account.

According to Hassan, excluding the Telecom revenues, the budget deficit has actually increased by LL994 billion ($662 million) and the primary surplus dropped by LL1,000 billion ($750 million) from the same period of 2010.

Total spending during the first half of this year increased from the same period in 2010. The increase was mainly attributable to an expansion of LL183 billion ($122 million) in the electricity bill which stood at $677 billion in the first half of 2011. Total expenditures till June amounted to LL8,490 billion ($5.6 billion), compared to LL 7,900 billion ($5.2 billion) for the first half of 2010.