Lebanon's Sovereign Debt Amounts to 23.2 Trillion Lira

Official data published on Wednesday showed that the Lebanese government's debts to local and foreign banks amounted to about 23.2 trillion liras ($15.4 billion) at the end of March.

A report by Banque Du Liban indicated that the government's debt to banks constituted approximately 25% of the total debt in the local currency, which amounted to about 91 trillion LBP ($60.4 billion) by the end of March.

The report stated that most of the government's debts to more than 70 banks operating in Lebanon are in the form of government bonds purchased by banks in the past years, of which the Bank Du Liban is the largest creditor to the government, with about 56 trillion LBP ($37.2 billion) by the end of March.

The report added that the government's debt to non-banking institutions amounted to about 11.7 trillion liras in the form of treasury bonds.

The accumulated government debt coincides with the worst financial and economic crisis that hit the country, since it gained its independence from France about 78 years ago, in addition to the accumulation of budget deficits, the current balance, mismanagement, and widespread corruption.

Data from the central bank showed that the public debt in local and foreign currencies exceeded $97 billion at the end of April, an increase of 50% compared to $60 billion at the end of 2017, due to massive borrowing and the accumulation of interest.

Huge sums provided by bank in the past years, to support imports of medicine, fuel and consumer goods, eroded its external reserves, which prompted it to take decisions in the recent period to gradually halt subsidizing most imports.

Banque Du Liban data showed that foreign assets fell to about $21.1 billion, compared to $20.5 billion in 2009.

Reserves reached their highest level of $43.4 billion in September 2017, before beginning their rapid decline in the following years.

In addition to the erosion of assets, the crisis also led to the collapse of the Lebanese lira from its official price of 1,507 LBP to the dollar, to more than 18,000 LBP on Wednesday, more than 90% since last year, causing huge rises in the prices of basic commodities.