According to the Ministry of Finance (MoF) and the Association of Banks (ABL), Lebanon’s gross public debt climbed by an annual 6.19% to reach $79.52B by end-2017. In fact, the recorded growth almost equated that of 2016.
In details, local currency debt (denominated in LBP) grasped a share of 61.8% of total gross debt and rose by an annual 5.03% to reach $49.14B by Dec. 2017. Meanwhile, foreign currency debt composed the remaining 38.2% of the total and registered a yearly uptick of 8.11% to $30.38B over the same period.
As such, the composition of the debt stock by the end of the year continued to reflect a higher growth rate in foreign currency debt than in Lebanese pounds (LBP) debt, and this is partly due to the $1.7B Eurobonds swap issuance in November 2017.
In terms of LBP debt holders, Lebanese commercial banks held 37.5% of total debt, while BDL grasped a stake of 48% of total debt in LBP in 2017. Meanwhile, the non-banking sector’s share of gross total debt in LBP stood at 14.5% by December 2017.
As for foreign currency debt, its composition revealed that Eurobonds constituted 92.4% of the total debt in December, sliding marginally from 92.6% in December 2016. The remaining was covered by multilateral and bilateral loans.
In its turn, net public debt which excludes the public sector deposits at commercial banks and the Central Bank, rose by 5.96% year-on-year to settle at $69.32B at the end of 2017.
It is worthy to mention that the IMF’s latest mission in Feb 2018 confirmed the Lebanese authorities’ “significant achievements”, namely the passing of a budget in October 2017. Yet, “the overall economic situation remains fragile” with public debt estimated above 150% of GDP in 2017 and expected to rapidly rise. Therefore, the IMF reiterated the urgency of placing debt on a downward, sustainable path, especially in light of a “funding environment [that] has been affected by the political crisis of November 2017.”
Yearly Growth Rate of the Gross Public Debt by December
Source: MoF