BEIRUT: Prime Minister Najib Mikati said Monday the government is in the process of establishing a fund from revenues generated through oil and gas exploration, with the aim of decreasing the public debt-to-GDP ratio to a manageable 60 percent.
“We are working on establishing a fund from revenues generated through oil and gas exploration that will allow us to whittle down the public debt to 60 percent of GDP,” Mikati said at the Grand Serail.
Lebanon’s debt-to-GDP ratio currently stands at an estimated 137 percent, with a public debt of $53 billion as of October 2011.
Successive governments have been struggling to reduce the public debt, which at one point reached 185 percent of GDP before falling to 135 percent of GDP last year.
Finance Minister Mohammad Safadi has predicted that the public debt will surge to $60 billion by the end of 2012. In his 2012 draft budget, Safadi proposed an increase in taxes in a bid to keep the public debt low.
The budget deficit in the first eight months of 2011 fell by LL858 billion compared to the same period last year, reaching LL1.471 trillion or 21.42 percent of total spending.
Mikati’s Cabinet agreed last month to begin work on exploring oil and gas in Lebanon’s undisputed territorial waters. The approval of the legislation would open the door for the Cabinet to draw tenders to start oil exploration off the Lebanese coast.