Abstract:

This article provides an in-depth analysis of Lebanon's economic challenges, focusing on the intricate interplay between public debt, economic activity, and inflation. It begins by emphasizing the critical role of effective external debt management for developing nations, specifically focusing on Arab countries from 2013 to 2018, highlighting the volatile global economic factors contributing to rising public debt in the region. The concept of sustainable external debt is introduced, underscoring the need for Lebanon to balance fiscal stability with debt management guided by IMF thresholds. Lebanon's financial predicament takes center stage, with its substantial external public debt reaching $91 billion by 2019, primarily through government bonds, making debt negotiations complex. Historical factors, including the civil war and debt accumulation, are explored for their socioeconomic impact. The article concludes by addressing Lebanon's contemporary crises, including currency instability and banking fragility, and emphasizes the nation's efforts to seek IMF support and implement extensive reforms to tackle its economic and financial turmoil comprehensively.

Keywords:

Lebanon, Public debt, Inflation, Fiscal stability, IMF support.

How to Cite:

Balouza Mohamad. The Interplay of Public Debt, Economic Activity, and Inflation: A Critical Examination. [ref]: vol.21.2023. available at: https://refpress.org/ref-vol21-a309/