Lebanon’s gross pubic debt roughly stagnated m/m but grew 3.2% y/y to LBP108tn ($71.7bn) in May, data from the central bank showed. The annual expansion has softened so far in H1 as the government has not tapped the foreign debt market or made debt swaps given the lack of consensus among the current cabinet. In H2 this year, Lebanon’s indebtedness will increase further amid plans to sell Eurobonds and conduct debt swaps to finance much needed budget needs.

The LBP-denominated debt grew 4.9% y/y to LBP66.4tn (61.5% of the total) while the FX-denominated debt rose a meagre 0.7% y/y to LBP41.7tn.

Net public debt, which excludes public sector deposits at commercial banks and the central bank from gross public debt, rose just 1.6% y/y to LBP94.3tn at end-April.

Lebanese banks held 43.5% of the total debt at end-April and the central bank had a 40.3% share.

Lebanon’s fiscal position worsened sharply in 2015 amid falling state revenue, weighing heavily on the country’s indebtedness and related creditworthiness. The budget deficit spiked 29% y/y to LBP6tn ($4bn) last year.