The World Bank recently released its “International Debt Statistics 2021” (IDS 2021) report shedding light on the trends in external debt and financial flows (debt and equity) across 120 low and middle-income countries during the year 2019. In details, the report unveiled that external debt stocks at low and middle-income countries increased by 5.5% in 2019 to around $8.14 trillion at a slightly higher pace of growth than that registered in 2018 (5.2%). Concurrently, the report uncovered that the value of net debt inflows to aforementioned countries dropped during the year 2019 to $383.0 billion, down from $532.0 billion in 2018. This substantial contraction comes mainly as a result of the drop in short-term net debt inflows from $219.0 billion in 2018 to $30.0 billion in 2019. Furthermore, always according to the IDS 2021 report, foreign direct investment (FDI) inflows to concerned countries declined slightly in 2019 to $479.0 billion, down from $490.0 billion in 2018.

On the local front, the World Bank report revealed that net debt inflows to Lebanon contracted by 202.27% on an annual basis to negative $5.71 billion in 2019, down from $5.59 billion in 2018. This drop is attributed to the significant contraction in long-term debt flows from $8.80 billion to negative $5.13 billion, coupled with a decrease in short-term debt flows from negative $3.22 billion in 2018 to negative $0.58 billion in 2019. Lebanon’s external debt stock contracted by 7.18% y-o-y to almost $73.99 billion at end of 2019, mainly driven by the 6.95% drop in long-term external debt to $68.76 billion down from $73.89 billion in 2018. As far as net equity inflows are concerned, FDI inflows to Lebanon fell during the past year reaching $2.22 billion compared to $2.65 billion in 2018. According to the World Bank report, Lebanon’s total debt to exports ratio dropped from 363.0% in 2018 to 352.0% in 2019 with the total debt to Gross National Income (GNI) ratio also falling from 146.0% in 2018 to 139.0% in 2019. In contrast, the reserves to total debt ratio rose from 51.0% in 2018 to 52.0% in 2019.