The World Bank recently released its “International Debt Statistics 2020” (IDS 2020) report shedding light on the trends in external debt and financial flows (debt and equity) across 122 low and middle-income countries during the year 2018. In details, the report unveiled that external debt stocks at low and middle-income countries increased by 5.2% in 2018 to around $7.8 trillion at a much lower pace of growth than that registered in 2017 (10.4%). Concurrently, the report uncovered that the value of net debt inflows to aforementioned countries dropped during the year 2018 to $528.7 billion, down from $734.4 billion in 2017. This substantial contraction comes mainly as a result of the drop in short-term net debt inflows from $325.8 billion in 2017 to $224.9 billion in 2018, coupled with the 25.65% dip in long-term net debt inflows to $303.8 billion. Furthermore, always according to the IDS 2020 report, foreign direct investment (FDI) inflows to concerned countries declined slightly in 2018 to $468.6 billion.

On the local front, the World Bank report revealed that net debt inflows to Lebanon widened by 67.86% on an annual basis to $5.40 billion in 2018 up from $3.22 billion in 2017. More specifically, these inflows are attributed to the significant rise in long-term debt flows from $2.31 billion to $8.62 billion outweighing the drop in short-term debt flows from a $909 million reading in 2017 to a negative $3.22 billion in 2018. Lebanon’s external debt stock grew by 7.23% y-o-y to almost $79.35 billion at end of 2018, mainly driven by the 13.20% appreciation in long-term external debt to $73.53 billion up from $64.95 billion in 2017. As far as net equity inflows are concerned, FDI inflows to Lebanon increased during the past year reaching $2.88 billion compared to $2.56 billion in 2017. According to the World Bank report, Lebanon’s total debt to exports ratio rose from 343.0% in 2017 to 349.0% in 2018 with the total debt to Gross National Income (GNI) ratio also rising from 139.0% in 2017 to 145.0% in 2018. In contrast, the reserves to total debt ratio dropped from 59.0% in 2017 to 51.0% in 2018.