Gross public debt valued
at $12 billion in real terms

Severe depreciation erases

most of the value of Treasury bills

Gross public debt, which increased in nominal terms by five percent to $100.4 billion at the end of 2021, has a real market value of no more than $12.4 billion. This brings the real debt-to-GDP ratio down to 60 percent.

The lira component of the debt, mostly in Treasury bills, is valued at around LL93 trillion, equivalent to $62 billion according to the still official rate of LL1,500 to the dollar. Its market value, according to Sayrafa, is around $4.7 billion in real dollars.

The foreign currency debt component totals $38.5 billion, with accrued interest and other obligations. Most of it is in the form of Eurobonds, trading at around 11 percent to 12.25 percent of their par value at the time of this writing. Local dollars (US dollars stuck in the banking system also called lollars) are trading at around 20 percent of their nominal value. This brings the foreign debt component down to $4.5 billion if calculated based on Eurobond prices, or $7.7 billion according to the market value of the local dollar.

The gross total debt is therefore estimated at $9.2 billion to $12.4 billion.

The sharp decrease in domestic debt in terms of real dollars does not make public debt more sustainable due to the substantial contraction in GDP, according to the World Bank. “Public debt ratios, which were already notoriously unsustainable, are further aggravated by the economic crisis,” the bank said in its ‘Lebanon Economic Monitor’ for the fall of 2021.