A decline in revenues, partly because of the Israel-Hezbollah war, the Israeli siege of Beirut's airport and seaport and an increase in servicing the debt pushed the national deficit to 39 percent of total expenditure in fiscal 2006, which ended in December, the Finance Ministry said in a statement carried on the state-run news agency.

Revenues totaled about 7.3 trillion Lebanese pounds (US$4.86 billion/€3.75 billion), a drop from 7.4 trillion (US$4.94 billion/€3.81 billion) in the previous year.

The country also spent about 11.88 trillion Lebanese pounds (US$7.92 billion/€6.11 billion) in the 12-month period, a 16.4 percent over fiscal 2005.

Paying interest on the national debt accounted for 38 percent of spending — about 4.6 trillion Lebanese pounds (US$3.04 billion/€2.35 billion). The cost reflected an 1.02 trillion pound (US$682 million/€526.48 million) increase from the previous year.

Lebanon, a country of 4 million people, is one of the world's most indebted nations, with a total of US$40 billion (€30.88 billion) in state debt. The amount is equivalent to about 185 percent of Lebanon's annual economic output.

An international donors' conference in Paris last week raised US$7.6 billion (€5.87 billion) in soft loans and grants to help Lebanon's ailing economy. The government also hopes an economic reform program and an influx of capital will help kick start an economy ravaged by last summer's 34-day war and ongoing political tensions.

Lebanon was expecting a record Tourist season last summer as 2 million tourists were expected. Unfortunately the war between Israel and Hezbollah, ( which was triggered by the kidnapping of 2 Israeli soldiers by Hezbollah) prevented any tourists from coming to Lebanon and those who were in the country were evacuated. The last thing Lebanon needed for its economy was that war , which left the country in ruins.

Sources: IHT, AP, Ya Libnan