Moody's Sees Risk of Lebanon Debt Rescheduling Despite Budget

Slowing capital inflows to Lebanon and weaker deposit growth increase the risk of a debt rescheduling or other steps that may constitute a default despite fiscal consolidation measures in the 2019 draft budget, Moody’s Investors Service said. The draft budget aims to cut the deficit to 7.6% of gross domestic product from 11.5% last year, with Lebanese leaders warning the country faces financial crisis without reform, Reuters reported. Asked about the Moody’s credit analysis, Finance Minister Ali Hassan Khalil said on Thursday “matters are under control”. Lebanon’s public debt is 150% of gross domestic product, among the largest in the world. State finances are strained by a bloated public sector, debt-servicing costs and subsidising the loss making state-power producer. The state is riddled with corruption and waste. Read more