PM Najib Mikati visited the Association of Banks in Lebanon. President Torbey and ABL Board Members welcomed Mr. Mikati in the presence of Minister of Economy, Mr. Nicolas Nahas and Governor of BDL, Mr. Riad Salameh. A lunch followed meeting and welcome speech.

Prime Minister Najib Mikati said the government is 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 during a meeting with representatives of the banking sector at the Association of Banks in Lebanon headquarters.

Lebanon is yet to tap into its undiscovered oil and gas wealth off the coast as the Energy Ministry prepares the tender for companies to start drilling in the coming few months.

Lebanon’s debt-to-GDP ratio currently stands at an estimated 137 percent, with a public debt of $53 billion as of October 2011.

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.

For his part, the president of ABL Joseph Torbey highlighted the important role played by Lebanese banks to shore up the economy.

He stressed that banks financed most of the needs of the successive governments and this has allowed Lebanon to be independent from external intervention of international banks and financial institutions.

“Our financing contributions have exceeded $30 billion, 44 percent of which is in foreign denominated currency and the remaining 56 percent in Lebanese pounds or 77 percent of the country’s GDP,” Torbey explained.

Torbey heaped praise on Central Bank Governor Riad Salameh who was instrumental in safeguarding the monetary policy and protecting the Lebanese pound.

He also shed light on the banking sector’s efforts to help the Lebanese economy stand on its feet, noting that the banks have provided more than $5 billion worth of housing loans for 70,000 housing units all over the country.

Torbey called on the government to tighten the belt and implement reforms to keep the budget deficit low.