Lebanon Needs Financing to Keep ‘Show on the Road'

Lebanon’s plan to bring its budget deficit back into single digits is a step in the right direction, but it needs to regain market access to keep default concerns at bay, Fitch’s rating analyst said on Thursday, Reuters reported. Heavily indebted Lebanon’s government approved a 2019 budget on Monday including deep spending cuts to narrow its projected deficit to 7.6% from 11% of gross domestic product (GDP) and stave off a financial crisis. Fitch put a ‘negative outlook’ - effectively a downgrade warning - on its ‘junk’ B- Lebanon rating in December. Sovereign team director Toby Iles told Reuters that implementation of the “pretty ambitious” budget was key. “There may be some positive sentiment effect,” he said, “But I do think given the track record (of not implementing spending cuts) people will want to see some results for this to have a lasting impact on confidence.” Read more