Lebanon To Tap Bond Market For $1.3bn As IMF Warns On Debt Levels

Lebanon’s Ministry of Finance is to return to the bond market this month with a new issue of $1.3bn, following government approval at the end of August. This follows an IMF warning the previous month that “with public debt already exceeding 130% of GDP and gross financing needs around 25% of GDP in 2015, Lebanon faces significant risks to public debt sustainability.”

Lebanon’s gross public debt hit $69bn at end-June – a whopping 133% of GDP – up from $66.6bn at end-2014. The IMF predicts the debt will further rise to $72bn by end of this year (see graph).

The IMF’s latest report on Lebanon, released in July, includes a special section on Lebanon’s public debt sustainability. Under the “baseline scenario” Lebanon’s debt and financing needs continue to rise as a share of GDP, reaching 143% and 40% respectively by 2020, the end of the IMF’s forecast period.


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