BEIRUT - Prime Minister Saad al-Hariri said on Tuesday he believed Lebanese banks were ready to give his government the financial support it needs, through low interest rates, to launch overdue economic reforms.
Lebanon has one of the heaviest public debt burdens in the world at some 150 percent of gross domestic product (GDP). Serious reform steps could unlock $11 billion in financing pledged at a donor conference last year to help Lebanon build infrastructure to boost its economic growth.
"We want to carry out the necessary reforms for the benefit of the Lebanese citizen and public finances," Hariri told a banking conference in Beirut. "I am confident that the banks and central bank governor will be ready to help us."
The draft budget for 2019 projects a deficit of less than 9 percent of GDP compared to 11.2 percent in 2018 and includes "wide reductions" in spending based on the need for "exceptional austerity measures", Finance Minister Ali Hassan Khalil told Reuters last week.
Promised reforms include starting work to reduce the deficit in the state-subsidised power sector - a major drain on public finances - as well as "sound management of the public debt to reduce its cost" and reducing waste and corruption, Khalil said.
State finances are burdened by a bloated public sector, high debt servicing costs and hefty subsidies spent on the power sector. Hariri has said the reforms will be "painful" but said that Lebanon faces "catastrophe" without them.
(Reporting by Ellen Francis Editing by Gareth Jones) ((Ellen.Francis@thomsonreuters.com;))