Lebanon needs a plan to manage its huge public debt that offers a chance to “liberate the public budget from the burden of a deadly accumulation of debt and debt service”, Minister of Finance Ali Hassan Khalil said yesterday.
Reuters reported Khalil telling parliament that such a plan would need to be discussed by stakeholders including the government, the central bank and commercial banks.
“This requires a dialogue by the government, between the government and [parliament], a dialogue in which the central bank participates and the banks participate. This matter has happened and is happening,” he said.
Khalil gave no details of any measures he hoped such a plan would include.
He was speaking during a parliamentary debate on the 2019 state budget that aims to slash the deficit through measures that include revenue raising steps, spending cuts and a plan to cut the cost of public debt servicing.
The debate, which was scheduled to conclude yesterday, was extended until today. The budget is expected to be approved by a majority of MPs.
Khalil has previously said the government plans to shave some $660 million from the debt servicing costs through issuing low interest treasury bills.
Speaking in parliament, Khalil said the government was “clearly committed” to reducing the public debt service cost by the amount set out in the draft budget.
Lebanon’s central bank governor has said he backs government efforts to cut public debt servicing costs in the 2019 budget but an agreement has yet to reached on how that will be done and nothing should be imposed on commercial banks.
Lebanon’s public debt-to-GDP ratio was expected to be 151 per in 2019, Khalil said.
Lebanon said earlier this year it was absolutely not proposing any restructuring of public debt and was committed to paying all maturing debt and interest payments on the predetermined dates.