If Lebanon’s new prime minister believed his recently assumed position was going to be easy, then he should think again. The Lebanese government’s budget deficit during the first 10 months of the year 2000 stood at $2.7 billion, or 51.2 percent of spending, reported the Daily Star. This, compared to $2 billion, or 44.8 percent of spending, during the same 10-month period in 1999.
To make matters worse, the $346 million-deficit in October equaled 54.8 percent of spending. But that was lower than the 57.8 percent of spending reported for the same month of last year. According to the Daily Star, the accumulated budget deficits have created a public debt worth more than $22 billion, or roughly $5,500 per every Lebanese citizen. The public debt equals 140 percent of GDP, which is one of the highest ratios in the world.
The Lebanese finance ministry is committed in this current year to keeping the total deficit below 50 percent. However, economists doubt whether this is possible, especially in light of the fact that the deficit figure includes the money that the government is obliged to spend on T-bill interest and principal.
The cost of servicing its debt is uncomfortably high; and currently consumes about 45 percent of government spending. Indeed, debt servicing costs rose 16.7 percent to $2.3 billion during the first 10 moths of 2000, from $1.97 billion during the same period last year. That being the case, it appears as if the government will not be able to meet the prediction made by the former finance minister, George Corm, that total debt-servicing costs would stand at $2.6 billion during 2000.
And in the good news-bad news department: the revenues of the Lebanese government from January through October rose by 4 percent to $2.6 billion; unfortunately revenues rose by 18.5 percent to $5.3 billion during the corresponding period last year. — (Albawaba-MEBG)