Moody’s sees risk of Lebanon debt rescheduling despite budget

Lebanon has long depended on financial transfers from its diaspora to meet the economy’s financing needs. (AFP)
Updated 27 June 2019
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Moody’s sees risk of Lebanon debt rescheduling despite budget

  • The draft budget aims to cut the deficit to 7.6 percent of gross domestic product from 11.5 percent last year
  • Lebanon has long depended on financial transfers from its diaspora to meet the economy’s financing needs
BEIRUT: Slowing capital inflows to Lebanon and weaker deposit growth increase the risk of a government response that will include a debt rescheduling or another liability management exercise that may constitute a default, Moody’s Investors Service said.
This was despite fiscal consolidation measures included in the draft 2019 budget that is being debated in parliament, Moody’s said in a June 25 credit analysis.
Asked about the report, Finance Minister Ali Hassan Khalil said on Thursday “matters are under control.”
The draft budget aims to cut the deficit to 7.6 percent of gross domestic product from 11.5 percent last year, with Lebanese leaders warning the country faces financial crisis without reform.
Lebanon’s public debt is 150 percent of GDP, among the largest in the world. State finances are strained by a bloated public sector, high debt-servicing costs and subsidies for power.
The Moody’s report said: “Despite the inclusion of fiscal consolidation measures in the draft 2019 budget, slowing capital inflows and weaker deposit growth increase the risk that the government’s response will include a debt rescheduling or another liability management exercise that may constitute a default under our definition.”
Lebanon has long depended on financial transfers from its diaspora to meet the economy’s financing needs, chiefly the state budget deficit and the current account deficit of an economy that imports heavily and exports little by comparison.


Detainee allegedly tortured in Sudan dies: doctors

Updated 7 min 30 sec ago
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Detainee allegedly tortured in Sudan dies: doctors

  • The man died on Saturday in the town of Dilling in the state of South Kordofan after he was detained by agents of the feared National Intelligence and Security Service
  • It was NISS that led a sweeping crackdown on protests against Bashir’s rule that first erupted in December

KHARTOUM: A Sudanese civilian detained and allegedly tortured by security agents in a central town has died in custody, a doctors committee linked to the country’s protest movement said Sunday.
The man died on Saturday in the town of Dilling in the state of South Kordofan after he was detained by agents of the feared National Intelligence and Security Service (NISS), the doctors committee said in a statement.
The detainee “passed away on July 20, 2019 from torture while in detention at the NISS office in Dilling,” the statement said without elaborating on the circumstances of his arrest.
“NISS continues to torture and claim innocent civilian lives illegally without facing any consequences.”
Officers of NISS were not immediately available for comment.
Rights groups and activists had regularly accused NISS agents of cracking down on dissidents and restricting freedoms during the regime of veteran leader Omar Al-Bashir who was ousted in April.
It was NISS that led a sweeping crackdown on protests against Bashir’s rule that first erupted in December.
Dozens were killed and hundreds of protesters, activists and opposition leaders were arrested during the months-long campaign that led to Bashir’s overthrow and subsequent demonstrations calling for civilian rule.
Last week a power-sharing deal was inked between the protest leaders and the ruling generals who seized power after ousting Bashir.
More talks between the two sides to thrash out some pending issues have been suspended following differences within the protest movement itself over the power-sharing deal.