According to Moody’s, the public debt, which amounts to $21 billion represents 140 percent of the GDP, a very high ratio compared to other countries.
The Treasury Bills portfolio reached $15.5 million, a level exceeding the country’s GDP. Debt servicing absorbed 90 percent of public receipts during the first seven months of the year.
The next government must hasten the privatization process, control public expenditures while stimulating growth and introducing the VAT.
Moody’s current LBP Treasury Bills rating is B1.
“Even if the attribution of an inferior notation has little impact on these bonds, which are mainly held by local banks and investors, serious effort must be expanded to reduce the budget deficit” according to an analyst quoted by the Daily Star, (09/12/2000).
Eurobonds
the issue scheduled for September was reported sine die by the Ministry of Finances, the investors preferring to wait for the formation of the new government.
According to Bank Audi’s quarterly economic report, the GDP registered a drop of 0.5 percent during the first quarter of the year.
Public finances in August
Total receipts: LBP468 billion; total expenditures: $868 billion; total deficit: 46 percent against 54 percent in July and 57.5 percent in June.
France granted Lebanon a credit line of FF50 million aimed at helping Lebanese small and medium size enterprises purchase French goods and services.
Interest rates on this preferential loan will vary between 2.6 percent and 3.5 percent for 9-12 years with a grace period of 4 years.
The volume of transactions at Beirut’s stock exchange registered a drop of 28 percent while the amount of transactions fell by 30 percent between the first eight months of 1999 and the equivalent period of 2000. Market capitalization fell by 5 percent to reach $ 1.65 billion.
Industrial investments fell by 31 percent in August 2000, compared to August 1999. Investments actually fell from LBP 8.2 billion to LBP 5.7 billion over the same period. However, 47 new firms were created against 34 in August 1999. Since the beginning of this year, 276 new industrial firms have been created offering 2,512 new job opportunities. — ( Banque Libano-Française Sal )
