Lebanon will overcome its economic crisis, Finance Minister Ali Hassan Khalil said on Friday as Fitch downgraded the country's credit rating to CCC while Standard & Poor's kept it at B-/B.
Khalil said in a statement late Friday that the ratings reports showed the urgency for reforms, which the government has long put off.
"There should be no slacking for a single moment," he said.
Lebanon is grappling with one of the world’s heaviest public debt burdens at 150 percent of GDP and years of low economic growth.
Last month, Lebanon's parliament ratified a controversial austerity budget that aims to save the economy.
Fitch said on Friday its downgrade of the country’s credit rating to CCC from B- reflected “intensifying pressure on Lebanon’s financing model and increasing risks to the government’s debt servicing capacity.”
Lebanon requires substantial capital inflows to fund its large twin budget and current account deficits, it added.
S&P Global affirmed Lebanon’s credit rating at B-/B and said the outlook remains negative. The report said it expects Lebanon to make progress on reforms to improve investor confidence given the weakness of foreign currency inflows.
“We will deal responsibly with the reports,” Khalil said. “We are confident we will be able to get out of the crisis.”
Markets have been pricing in the risk of a sovereign credit rating downgrade in recent days.
