The data released by the Ministry of Finance (MoF) recently, indicated that Lebanon’s gross public debt hit $98.17B in May 2021, thereby recording an annual increase of 5.4%.
The rise is mainly attributed to the annual increase in both local and foreign currency debt by 4.38% and 7.15%, respectively. In details, debt in local currency (denominated in LBP) stood at $61.10B in May 2021. As such, domestic debt constituted 62.23% of the total public debt.
Meanwhile, total debt denominated in foreign currency (namely in USD) reached $37.08B over the same period. Therefore, total foreign debt grasped a stake of 37.77% of the total public debt by May 2021. It is worth mentioning that $7.39B represents the unpaid Eurobonds, their coupons and accrued interests, due to the default on government Eurobonds in March 2020.
Looking at net domestic debt, which excludes public sector deposits with the central bank and commercial banks, it increased by 1.07% YTD to $49.61B in May 2021.
The Lebanese debt has always represented a burden on the Lebanese economy even before the financial crisis. In fact, the government’s debt is the highest in the world at over 300% of GDP. The government should not rely in its potential recovery plan on financial support only, but it should have a structural plan that can built a productive economy in the long term and involve a sustainable fiscal framework.
Domestic and Foreign Debt by May ($B)
