Record public debt
at $70 billion

Debt-to-GDP ratio stabilizes and
lower oil prices bolster budget

The gross public debt increased by 5.6 percent to $70.3 billion at the end of 2015 compared with a year earlier, according to Ministry of Finance (MoF) data.

The domestic part of the debt escalated by 5.6 percent to $43.3 billion while foreign debt widened by 5.7 percent to $27 billion.

The debt-to-GDP ratio is stabilizing and ended last year at 136 percent, which was close to its value in 2014. This ratio amounted to 185 percent ten years ago.

The decline in oil prices had a positive impact on public finances last year, said Marwan Barakat, Head of Research at Bank Audi. The reason the budget deficit-to-GDP ratio fell to 6.5 percent in 2015 is that transfers to Electricité du Liban (EDL) plunged by 40 percent thanks to lower oil prices. He said that although the budget deficit-to-GDP ratio is still high by emerging markets and international standards, it is far below what it was ten years ago at 15 percent.

Last year, Parliament allowed the Government to borrow up to $3 billion in 2016.

The increase in interest rates in the US did not have any significant impact on local interest rates, according to Barakat. There will be a delay in cutting interest rates in the US in 2016 due to weakening global markets, he said.