Moody's Sees Possibility of Lebanon Debt Rescheduling Despite Budget...Khalil Says 'All Under Control'

W460

Moody's Investors Service said that the slowdown in capital inflows in Lebanon and the decline in deposit growth are fueling the government's move to take measures including debt restructuring or another liability management exercise that may constitute a default.

In a credit analysis on June 25, Moody's said “this was despite the fiscal consolidation measures included in the 2019 draft budget that is being debated in parliament.”

“Slowing capital inflows and weak deposit growth reinforce the likelihood that the government will take measures including debt restructuring or another liability management measure that could constitute a default under our definition,” said Moody’s.

In that regard, Finance Minister Hassan Khalil said when asked about the report: “Things are under control.”

Lebanon’s cabinet approved a budget expected to trim Lebanon's deficit to 7.59 percent of gross domestic product -- a nearly 4-point drop from the previous year.

Debt servicing and public sector salaries and benefits each will make up 35 percent of the budget, while government subsidies to the state-owned electricity company will constitute 11 percent.

SourceNaharnet
Comments 4
Thumb doodle-dude 27 June 2019, 14:37

lol @ “Things are under control.”

Thumb ___flamethrower___ 27 June 2019, 16:05

he is already 70 years old!

Thumb warrior 28 June 2019, 06:46

A thief is reassuring the nation that things are under control !

Thumb EagleDawn 28 June 2019, 10:41

lol@blacacabla
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