Lebanon recorded a cash surplus of Pound108,698 billion in the first half of 2026, an increase of 20 per cent over one year. But more than a third of the revenue received remains to be allocated between tax and non-tax categories. Behind the improvement of the balance, this accounting uncertainty and the fall in taxes collected in the second quarter require a cautious reading.
The note published on 3 November by Jana Boumatar of the research department of BLOMINVEST takes up thePublic Finance Review – First Half 2026ministry of Finance. The ministerial document, announced on 22 October, describes the actual cash flow from the Treasury Field Unit and Customs. It warns from its first page that these data remain provisional, subject to reconciliation, reclassification and adjustment. The figures are used to assess the receipts and payments for the semester. They do not constitute final state accounts.
Increasing surplus despite more dynamic spending
Revenues and donations reached £304,335 billion, compared with £243,802 billion in the first half of 2025. Their increase is 24.8 per cent. Expenditures increased from 153,193 billion to 195,636 billion, an increase of 27.7 per cent.
How can the surplus increase as spending grows faster? The two percentages apply to different bases. The additional receipts represent about £60,500 billion, compared with about £42,400 billion in additional payments. The difference thus improves the balance in absolute amount.
| Indicator | First half 2025 | First half 2026 | Change |
|---|---|---|---|
| Income and grants | 243 802 | 304 335 | +24.8% |
| Expenditure | 153 193 | 195 636 | +27.7 % |
| Cash surplus | 90 609 | 108 698 | +20,0 % |
| Primary surplus | 99 271 | 115 213 | +16,1 % |
Source: Department of Finance, Table 1, page 3. Amounts rounded as published.
The primary surplus measures the balance before interest payments. The term « primary » does not remove its temporary character or dependence on cash and disbursement dates.
Another difference: the overall surplus represents about 35.7% of revenues and donations in 2026, compared to 37.2% a year earlier, according to our calculations. It increases in pounds, but its proportion in receipts decreases. This ratio does not measure debt sustainability; It simply shows that the body margin does not improve from all angles.
A third of the revenue is still awaiting classification
The most sensitive point in the report is « other income ». It reached £103,718 billion, compared with £67,740 billion a year earlier. Its increase of 53.1% represents an additional 35,978 billion, or about 59.4% of the total increase in revenues and donations.
These receipts are well recorded. However, their final allocation between taxes and non-tax revenues remains to be established. The department specifically states that the item includes amounts that have not yet been classified into one or the other category.
This distinction changes the reading of the balance sheet. Tax revenues identified total £147,570 billion, or 48.5 per cent of revenues and donations. The non-tax revenues identified represent $48,376 billion, or 15.9 per cent. The 34.1% « other revenues » cannot be added automatically to non-tax revenues. To these categories are added the cash receipts, for 4,462 billion, and donations, for 209 billion.
The Ministry provides an index of the possible origin of some of the unclassified amounts: the tax collection system shows a sharp increase in corporate tax in June. The deadlines for reporting the 2025 results and payment were successively extended until 30 June 2026. A concentration of regulations at that date could therefore explain part of the increase in « other revenues ».
However, tax and cash data are not directly comparable. The report does not allow us to quantify this share or to reclassify the amounts ourselves. The priority of transparency is specified here: publish their final breakdown and distinguish between recurring receipts and calendar effects. Without this work, the quality of revenue growth remains difficult to appreciate.
The second quarter shows a marked slowdown
The semi-annual total masks a breakdown. Compared to the same quarters of 2025, the growth in revenues and donations rose from 47.5% in the first quarter to 9.7% in the second. The tax revenues identified are rising from 45.1% to 12.7%. These are year-over-year variations, not a direct comparison between the first three months of 2026 and the following three.
Domestic VAT fell by 45.9% in the second quarter. This spectacular figure does not measure an equivalent contraction in consumption. The Ministry recalls that a deferral of payment had moved part of the VAT receipts from 2025 to the second quarter, changing the basis of comparison. Over the six-month period, domestic VAT fell by 10.8%, while import VAT increased by 2.5%.
These results extend the weaknesses already discussed in our analysis of thetax collection and activity in Lebanon. The report also combines low domestic revenues with a 37% decline in passenger arrivals over the semester. This rapprochement is consistent with a disturbed tourist activity; it does not isolate the exact contribution of tourism, tax calendar or recovery.
Another example of the necessary caution is the excise duty on fuel. Their revenues increased by 180.6% in the first half of the year, while imported volumes of 95 and 98 octanes decreased by 28.1%. The department mainly explains this variance by increasing the applicable duties. An increase in levies can thus support the State fund as the quantities exchanged decline.
Tobacco and telecommunications support receipts
The non-tax revenues identified are increasing by 30 per cent. The Régie des tabacs contributes £22,763 billion, an increase of 56.8%. Transfers from mobile companies amounted to $12,193 billion, an increase of 16.2%.
The Régie alone accounts for approximately 47% of the non-tax revenues identified, according to our calculations. This concentration highlights the weight of some organisms in the diet of the Treasury. It makes more detailed information on their results, their own needs and the timing of their payments useful.
Airport revenues increased by 33.2% over the semester, but fell by 68.4% in the second quarter according to the ministerial table. The contrast again illustrates the limits of a reading based solely on cumulation. It also prohibits mechanically assimilating the revenues of a public body to physical activity during the same period.
The increase in expenditure focuses on current needs
Current expenditure accounts for 77.2 per cent of the recorded payments. Staff costs, including salaries, benefits and pensions, amounted to £119,864 billion: 61.3% of the total, with an increase of 15.5%. This increase does not mean that individual wages have increased by 15.5 per cent.
Wages, salaries and social benefits are up 4.2 per cent, while pension payments are up 54.3 per cent. The Ministry links this latest development to the upgrades decided in 2025 for military and civilian retirees, whose effects are reflected in the disbursements of 2026.
Interest payments decreased from 24.8% to 6,515 billion. The report explains the absence of new domestic debt issues and the repayment of matured securities. This decrease improves the cash balance. It is not sufficient to establish the sustainability of the entire public debt, which requires an analysis of outstanding amounts, maturities and future liabilities.
Capital expenditures increased sharply from 5,990 billion to $15,500 billion, or almost 159%. Their share remains limited to 7.9% of total payments. Maintenance accounts for 7,569 billion, almost half of this envelope. Capital growth cannot therefore be fully presented as the creation of new infrastructure.
The details of the work in progress also require precision. Table 4 increases the amounts associated with the Southern Council from 225 billion to 5,219 billion, and the High Relief Committee from 2,040 billion. The Development and Reconstruction Council line fell from 1 199 billion to 120 billion. These data do not allow all organizations to have the same investment dynamics.
Higher social spending but uneven coverage
In its presentation by function, the Ministry records £86,843 billion in social spending, up 37.9%. This classification covers several categories already mentioned: this amount should not be added to total expenditure as if it were an additional envelope.
Health expenditures classified as non-public social protection amounted to $16,740 billion, an increase of 127.5 per cent. Purchases of medicines amounted to $7,863 billion and emergency relief to $7,773 billion. These increases provide information on the amounts paid, without directly measuring the number of patients covered, the availability of medicines or the proportion of needs actually met.
On the other hand, the report shows no transfer to the National Social Security Fund during the semester, compared with 1,203 billion a year earlier. Nor does it involve payments to the Civil Servants’ Cooperative, compared with $7,200 billion in 2025. These absences in the reported flows must be explained. They do not in themselves demonstrate the removal of State rights, benefits or obligations.
The questions to which the cash balance does not answer
The surplus gives the State a more favourable flow situation over the period. It alone does not constitute an inventory of money immediately available for new commitments. In order to move from half-yearly to financial capacity, it would be necessary to know, inter alia, the starting and end-of-period balances, the financing transactions and the outstanding payments.
The report does not provide a comprehensive record of commitments and possible arrears. Therefore, it cannot be said that the excess is due to unpaid invoices or that all obligations have been met. The useful criticism is to ask for this information, rather than to turn their absence into evidence.
The variations presented are also nominal. An increase in expenditures expressed in pounds does not automatically measure an equivalent improvement in public service. Prices, the nature of purchases, war-related needs and the timing of regulations must also be considered.
Finally, the customs annex recalls the fragility of the context: imports reach about $10.15 billion in the semester, compared with 1.50 billion exports. The trade deficit is around 8.65 billion, up about 10%. The quantities imported and exported, measured by weight, decreased by 18% and 24% respectively. This external deficit is distinct from the government balance. Their coexistence simply shows that a public surplus is not enough to describe the health of the economy.
The next public finance test will be the publication of close accounts and a full breakdown of revenues, together with information on liabilities and services financed. The receipts of the first half of the year offer a real improvement in the published balance. The ability to extend it will depend on sufficient regular revenue and an expenditure that meets the needs without postponing its costs outside the visible scope of the accounts.
Sources and method
- Lebanese Ministry of Finance, Public Finance Review – First Half 2026, 15 pages, announced on october 22, 2026: methodological warning and tax calendar pages 1–2 ; treasury aggregates page 3; revenue and taxation pages 4–6; expenses pages 7–10; social expenditure pages 10–13; foreign trade pages 14–15.
- Jana Boumatar, BLOMINVEST, Lebanese Public Finance Strength in H1 2026 Despite Tax Revenues Rising by Less than Spending3 November 2026, 9 pages. Summary cross-referenced with the full departmental report.
Budgetary amounts are expressed in billions of Lebanese pounds. Trade data is in US dollars. Comparisons cover the same periods of 2025 and 2026. The ratios explicitly presented as our calculations are obtained from published amounts. Small differences between totals and transactions on amounts displayed may result from rounding. Cash flows remain provisional and do not constitute final accounts.
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