Report: Officials to Tackle Ratings Downgrade in Baabda Meeting

Lebanese officials are expected to hold an “expanded economic” meeting at Baabda Palace to discuss ways to contain the repercussions after the credit ratings downgrade by international agencies, al-Joumhouria daily reported on Monday.

President Michel Aoun, Speaker Nabih Berri and Prime Minister Saad Hariri agreed to hold the meeting on September 2 at the Presidential Palace, said the newspaper.

According to the daily the dialogue session will be attended by senior political figures representing various parliamentary blocs to discuss the economic situation and take “painful” measures if necessary to put the economic situation on track.

On Friday, Fitch bumped Lebanon down to "CCC" while Standard & Poor's kept it at "B-/B" with a negative outlook.

Analysts have warned that Lebanon needs to accelerate reforms to revive its floundering economy, after the leading global agency downgraded its credit rating.

"The downgrade reflects intensifying pressure on Lebanon's financing model, increasing risks to the government's debt servicing capacity," Fitch said in a statement.

S&P said it could still lower Lebanon ratings over the next year if banking system deposits and the central bank's foreign exchange reserves continued to fall.

"Non-resident depositors and foreign investors will likely remain cautious of Lebanon unless the government is able to... implement structural reforms to reduce the large budget gap and improve business activity," it said.

Growth in Lebanon has plummeted in the wake of repeated political deadlocks in recent years, compounded by the 2011 breakout of civil war in neighboring Syria.

The country's public debt stands at more than 86 billion dollars, or higher than 150 percent of GDP, according to the finance ministry.

Eighty percent of that debt is owed to Lebanon's central bank and local banks.