Primary surplus in
public budget

Debt to GDP is declining

The fiscal deficit has widened so far this year, but a primary surplus has been registered, according to Alain Bifani, Director General of the Ministry of Finance (MoF).

The fiscal deficit widened by 33 percent to reach $1.7 billion in the first half of 2015. The primary surplus, which represents revenues and expenditures minus the service of the debt, reached $475 million. Primary surplus represented 2.6 percent of the Gross Domestic Product (GDP) in 2014.

The Debt to GDP ratio declined to reach 129 percent in 2014, down from 185 percent in 2006. “If we exclude from that debt what is being held by the Central Bank (BDL), the debt to GDP ratio will be less than 100 percent,” said Riad Salameh, Governor of BDL.

The banking sector has been a main support to financing the State’s needs and reducing the burden of high public debt. Bifani said that banks are financing 88 percent of the State’s debt.

In addition to mandatory reserves kept at BDL, commercial banks have $65 billion of available unused and unencumbered liquidity ready for lending and other matters and are other than the reserves held by the Central Bank. This is equivalent to 93 percent of the Gross Public Debt. These reserves are equivalent to more than the State’s debt in foreign currency by two and half times, according to Bifani.