Lebanon’s central bank supports government efforts to cut the public debt servicing cost in the 2019 budget, but an agreement has yet to be concluded over the measures, said Governor Riad Salameh on Tuesday.
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A cut in servicing the cost of Lebanon’s massive public debt has been factored into the 2019 draft state budget that aims to slice the deficit to 7.6% of GDP.
The budget was approved by cabinet last month and is being debated in parliament, Reuters reported.
Salameh noted that the central bank assumes the economy will have zero percent economic growth for 2019, though this could improve due to enhanced tourism.
“I think the outlook could be better starting in the second half of this year because of the consumer improvement due to a good touristic season but we have to wait and see,” he said.
Asked if an agreement had been concluded between the government and banking sector over low interest rate treasury bonds, Salameh said: “No. We are going to have discussions after the budget but the figures will be achieved.”
“We are going to discuss the best way to achieve that because we back it as a central bank, but nothing will be imposed on the banks,” he told Reuters on the sidelines of a Euromoney conference in Beirut.
Salameh also told reporters he did not foresee any problems for Lebanon in repaying maturing Eurobonds this year and the government’s solvency was not at stake.
