The rating reflects the losses incurred due to Lebanon’s ongoing default since March 16, 2020, according to Moody’s.

Its frail institutions seem unable to confront the nation’s deepening economic, financial, and social crises.

Due to the high probability of large losses for private creditors, the agency also modified the country’s outlook from no outlook to stable, reflecting its expectation that the “C” rating will stay in place for the foreseeable future.

The agency also anticipates a volatile economic environment to endure, because of persistent political impasse and weak institutions.

A spike in inflation that reached a startling 215.4% by the end of October 2023 compared to the same period the previous year, coupled with the collapse of the national currency in the parallel market, contributed to the economic distress.

The lack of significant steps toward realistic fiscal and economic policy reforms casts doubt on the viability of official external funding support to go along with a government debt restructuring in the near future.

A deepening Israel-Hamas conflict has the potential to reverse recent gains in the tourism industry and further undermine economic activity in Lebanon, a country beset by political impasse and weak institutions.

While the foreign currency ceiling stays at the same level, the agency also discovered that the local currency ceiling is still at “Ca,” indicating that its obligation is almost in default.

Lebanon’s ESG Credit Impact Score revealed a significantly lower rating than it would have otherwise gotten when taking governance, social, and environmental factors into account.

Reduced ability to withstand social and environmental risks is a result of governance limitations, falling wealth, and an overburdened government balance sheet.

The nation has long-standing problems with solid waste disposal and over 25% of the population has access to contaminated drinking water. In addition, there are water shortages that are expected to worsen if appropriate policies are not put in place.

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The proposal was shared with senior officials over the weekend which includes establishment of timeshare of property in the Emirate. This facility allows foreign owners to own a part of the villa or apartment for personal use for a set time period.

The Department targets between 500 and 1000 holiday units, reported Arabian Business.

“Dubai has established a clear and well-established economic policy which in turn has strengthened its ability to absorb rapid changes in an unstable global economy in order to achieve sustainable economic growth and enhance its competitiveness at all levels,” Sheikh Mohammed said in a statement.  

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