US-based credit rating agency ‘Fitch’ downgrades Lebanon’s credit rating from CCC to CC; This is the third drop for Lebanon in 2019; Fitch: Indications of recession, together with restricted access to bank deposits and goods shortages magnify the risk of further social unrest.
The US-based credit rating agency ‘Fitch’ has downgraded Lebanon’s credit rating from CCC to CC. This is the third credit downgrade for Lebanon in one year alone, signaling a very serious warning of what is likely to come. The ongoing protests in Lebanon that are primarily targeting their corrupt government played a major role in Fitch’s decision to downgrade them again. Fitch said that their decision was motivated by, “probable owing to acute political uncertainty, de facto capital controls and damaged confidence in the banking sector.”
Lebanon’s economic growth rates have been struggling for quite some time and their state of debt is one of the worst in the world. Due to this, Fitch additionally warned, “Indications of recession, together with restricted access to bank deposits and goods shortages magnify the risk of further social unrest. Rationing of U.S. dollars to prioritize repayment of government debt may become a more politically charged issue.”
While Lebanon is desperate for a sign of economic hope, Israel, just to the south, is maintain a rating of AA-, and Fitch says there is reason to believe in an even brighter future for the Jewish state.