The data released by the Ministry of Finance (MoF) recently indicated that Lebanon’s gross public debt hit $92.42B by March 2020, thereby recording an annual 7.2% uptick.
The increase is mainly attributed to the 11.22% annual increase in local currency debt (denominated in LBP) which reached $58.3B in Q1 2020. As such, domestic debt constituted 63.12% of the total public debt, compared to last year’s smaller share of 60.83%.
Meanwhile, total debt denominated in foreign currency (namely in USD) climbed by a yearly 0.92% totaling $34.08B over the same period. Therefore, total foreign debt grasped a stake of 36.9% of the total public debt by March 2020, compared to last year’s share of 39.2%.
Amid Lebanon’s ongoing economic woes and delayed negotiations with internal and external creditors, it is important to note that the country will be facing $600M worth of maturing Eurobonds (foreign currency debt) on June 19th 2020. This renders Lebanon’s total suspended payments on outstanding Eurobonds at $1.8B since March 09th 2020, when the country defaulted on the first batch of Eurobonds. However, the government in March had also announced that it will refrain from making payments on all dollar-denominated Eurobonds as it seeks to negotiate an arrangement with its bondholders and discuss the restructuring of its debt. To-date though, no major decisions regarding the restructuring of Lebanon’s public debt have been taken, despite a looming substantial $2.09B worth of Eurobonds maturing next, on April 12th 2021.
Breakdown of Gross Public Debt in Q1 (in $Billions)