Figures released by the Finance Ministry show that Lebanon’s net public debt totaled 38.154 billion Lebanese pounds ($25.22 billion) by the end of July 2001, reflecting a 17.3 percent rise over July the previous year, when the figure stood at LP32.528. When measured on month-on-month basis, net public debt recorded a 1.46 percent rise, up from LP37.604 in June 2001, according to Lebanon Central Bank figures.
Lebanon’s gross public debt amounted to LP40.584 billion ($26.83 million) at the end of July 2001. This constitutes a 14.3 percent rise in the total public debt, as compared with July-end 2000, when the figure stood at LP 35.503 billion. In June 2001, gross public debt totaled LP40.043 ($26.47 million).
The debt’s foreign currency component rose from 25 percent in July 2000 to 30 percent by the end of July 2001. At year-end 1995, foreign currency borrowing accounted for 18 percent of total public debt. This reflects the ongoing restructuring of the debt as the Lebanese government is gradually shifting towards foreign financing in order to borrow at lower cost and over a longer period of time, according to Lebinvest.
An International Monetary Fund (IMF) draft report, published in July, expressed cautious optimism over the government’s efforts to reduce the public debt. The IMF warned that the public debt might reach $40 billion by 2005, making up 175 percent of Gross Domestic Product (GDP), if the government failed to reduce the deficit through privatization and new taxes. Public debt currently exceeds 150 percent of gross domestic product, and the IMF report forecasted a rise in gross public debt to 176 percent of GDP by end-2001.
Lebanese Prime Minister Rafiq Al-Hariri told reporters that the government would attempt to reduce the public payroll and sell state assets to control the public debt, whose rise triggered downgrades by international rating agencies. "Every one is demanding to bring down the cost of government, and this is what we are doing," Hariri added. — (Mena Report)
© 2001 Mena Report (www.menareport.com )