Paris meet aims to ease Le­banon’s debt woes

Arab News - - FRONT PAGE -

Em­manuel Macron. The idea be­hind Paris is to gar­ner global fi­nan­cial sup­port for crum­bling in­fra­struc­ture amid con­cern about the coun­try’s abil­ity to with­stand fur­ther ex­ter­nal shocks. Beirut is said to be seek­ing $16 bil­lion in loans and grants, ac­cord­ing to Bloomberg.

US in­ter­est rates rises have fu­elled wor­ries about Beirut’s abil­ity to with­stand a level of in­debt­ed­ness that is al­most on a par with Greece’s fol­low­ing an in­ter­na­tional bail-out in 2012.

Dubbed the Cedar Con­fer­ence, other­wise known as Paris IV, this week’s meet­ing is one of sev­eral planned in Europe this year. It comes at a time when the In­ter­na­tional Mon­e­tary Fund is push­ing Beirut to im­ple­ment fis­cal re­forms to re­duce its high debt to GDP ra­tio that stands at about 150 per­cent and could rocket be­yond 180 per­cent, the IMF said.

Si­mon Qui­jano-Evans, emerg­ing mar­kets strate­gist at Le­gal and Gen­eral In­vest­ment Man­age­ment, told Arab News: “I think for emerg­ing mar­kets in gen­eral there is a vul­ner­a­bil­ity, es­pe­cially in the lo­cal cur­rency space, if the US dol­lar were to turn around and strengthen.

“Le­banon is one of the coun­tries more ex­posed in the hard cur­rency space, es­pe­cially given its high debt-GDP ra­tio,” Qui­janoE­vans, said.

Le­banon, among oth­ers, spends about a third of gov­ern­ment rev­enue on ser­vic­ing debt, ac­cord­ing to a re­port from char­ity, the Ju­bilee Debt Cam­paign.

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