BEIRUT: Lebanon’s budget deficit up to November 2011 slipped to 18.76 percent, or LL2.94 trillion (less than $2 billion), from 27.83 percent, or LL4.312 trillion, in the same period of 2010, the Finance Ministry said Tuesday.

The ministry added that the deficit in the first 11 months of 2011 shrunk by LL372 billion compared to the same period of 2010.

It attributed the drop in deficit to the rise in government revenues and most notably from the telecoms sector which generated LL1.991 trillion.

It stressed that the Telecoms Ministry had actually transferred LL1.055 trillion to the Treasury in November.

The telecoms revenues up to November rose by 50.7 percent or LL1.66 trillion.

However, former Finance Minister Raya Hasan and other March 14 figures continued to cast doubt about the data provided by Finance Minister Mohammad Safadi.

They claimed that the Telecoms Ministry refused in the past to transfer the proceeds of this sector to the Treasury under the false pretext that the law prohibits the ministry from channeling the funds until the end of the year.

The primary surplus, excluding the cost of debt servicing, jumped by LL218 billion to LL2.615 trillion in the first 11 months of last year. The primary surplus in the same period of 2010 stood at LL1.397 trillion.

Economists and experts say that the lack of investments in infrastructure such as electricity, water and roads have kept the deficit very low this year.

Safadi’s 2012 draft budget, which called for higher taxes that directly affect consumers, did not win the support of most ministers who fear that any taxes would trigger nationwide protests and would also cause prices of commodities to rise dramatically.

Against this backdrop, Safadi may be compelled to revise some of the clauses in the budget so that it can smoothly pass in the Cabinet and Parliament although such a scenario seems very unlikely given the political division in the country.

But the Finance Ministry may stop boasting about its ability to keep the deficit low when the government and Parliament pass a law to raise wages for public sector employees.

According to Safadi, the salary increase for the government employees will cost the Treasury nearly LL1 trillion a year and this means that the authorities may have one of two choices: either drop some investment projects or raise taxes.

The ministry added that total government revenues in the first 11 months of 2011 were LL12.731 trillion, an increase of 13.86 percent compared to the same period of 2010.

Revenues from VAT in the same reporting period surged by 2.61 percent to LL2.979 trillion.