The data released by the Ministry of Finance (MoF) recently indicated that Lebanon’s gross public debt hit $94.27B in August 2020, thereby recording an annual increase of 9.2%.
The increase is mainly attributed to the 9.76% annual increase in local currency debt (denominated in LBP) which stood at $59.04B in August 2020. As such, domestic debt constituted 62.64% of the total public debt, compared to last year’s smaller share of 62.34%.
Meanwhile, total debt denominated in foreign currency (namely in USD) climbed by a yearly 8.37% totaling $35.22B over the same period. Therefore, total foreign debt grasped a stake of 37.36% of the total public debt by August 2020, compared to last year’s share of 37.79%. It is worth mentioning that $3.78B represents the Unpaid Eurobonds, their coupons and accrued interests.
Observing the net domestic debt, which excludes public sector deposits with the central bank and commercial banks, it increased by 9.38% annually to $49.64B in August 2020.
It is worth noting that Fitch Rating has affirmed Lebanon’s Long-Term Foreign-Currency Issuer Default Rating at Restricted Default (RD) on August 20, 2020. Moreover, Lebanon’s foreign currency government debt remains in Restricted Default following the default on Eurobond maturity on March 9, 2020.
We can add that on 9th of August, the IMF required some reforms prior to granting Lebanon support packages, along with the World Bank’s financing and CEDRE USD 11 Billion of funds. Such reforms mainly comprise the restructuring of governmental debt and the financial sector along with structural reforms (especially EDL) amid the deteriorating economic situation and negative foreign currency position.
Domestic and Foreign Debt in August ($B)