BEIRUT - Lebanon's budget deficit in the first four months of 2008 rose to 30.29 percent, or LL1.421 trillion, of total spending, up from 26.73 percent in the same period of 2007 due to rising losses in the electricity sector, the Finance Ministry said Friday.

The ministry estimated that the deficit at state-owned Electricite du Liban (EDL) jumped by LL274 billion.

As a result, the primary surplus, excluding the cost of debt servicing, fell by LL128 billion to LL370 billion in the first four months of 2008.

The primary surplus in the first four months of 2007 stood at LL498 billion.

EDL has long been a source of headaches to successive governments which have tried in vain to reduce the losses of Lebanon's sole electricity producer.

Among the reasons behind the financial leakage of EDL are bad management, poor bill collection, electricity theft and the high cost of fuel oil.

The finance minister said recently that the losses of EDL are expected to reach $1 billion in 2008 because of high oil prices on international markets.

Total government spending in the first four months of this year reached LL4.691 trillion, up from LL4.121 trillion in the same period of last year.

The government revenues in the same reporting period reached LL3.270 trillion, an increase of LL251 billion on the previous year.

Total tax revenues jumped by 8.01 percent to LL2.927 trillion while the nontax revenues increased by 1.56 percent to LL845.939 billion.

Value added-tax generated revenues of LL875.011 billion, recording an increase of 20.78 percent from last year.

However, proceeds from tariffs fell by 11.02 percent to LL401.065 billion.

With a $43.2-billion public debt, Lebanon has few choices in reducing the debt burden, such as a series of measures to privatize the telecom and electricity sectors.

The government was hoping to generate around $6 billion from the privatization of the telecom sector but this step was delayed after six ministers quit the Cabinet. - Daily Star