Debt-to-GDP ratio lowest since 1999

Public finance 2011 review: GDP growth
at five percent, debt-to-GDP 135 percent

Estimated real growth last year was five percent, according to the public finance annual review published by the Ministry of Finance. GDP growth was seven percent, nine percent, and 8.6 percent in 2010, 2009, and 2008, respectively.

Gross public debt totaled $54 billion, growing by two percent on a yearly basis. The debt to GDP ratio fell to135 percent, its lowest level since 1999. The debt-to-GDP ratio was 142 percent in 2010.

The fiscal balance contracted by 19 percent to hit $2.3 billion. The total fiscal deficit to GDP ratio declined to 5.9 percent from 7.8 percent in 2010.

Expenditures totaled $11.7 billion, up by three percent. Higher transfers to Electricité du Liban and an increase in personnel cost were primary reasons behind this increase.

Total revenues rose by 11 percent to $9.3 billion. While tax revenues stood flat at $6.5 billion, growth in revenues was the result of a 70 percent increase in non-tax proceeds, driven by revenues from the Ministry of Telecommunication. These revenues have not been transferred yet to the Treasury.

VAT continued to represent the main source of tax revenue accounting for 33 percent of total tax revenue. Taxes on income, profits, and capital gains were the second highest accounting for 25 percent of the total, followed by excises at 14 percent, and taxes on properties at 12 percent.

Taxes on cars, both excises and registration fees, fell, mirroring a decline in car imports. Customs revenues saw a slight downturn despite increased imports. Built property tax and real estate registration fees also dropped due to slower growth in real estate sales.

Reported by Hanadi Chami