Lebanon launched formal debt restructuring talks on Friday with a pledge to implement an economic turnaround plan by year-end, but officials painted a gloomy picture of rapidly dwindling reserves and soaring inflation ahead. Lebanon, one of the world’s most indebted countries, suspended payments on all $31.3 billion of its international Eurobonds this month, saying it could no longer repay them while prioritizing scarce dollars for critical imports. It has also earmarked some $57 billion of domestic T-bills and bonds for restructuring, while just over $2 billion of bilateral and multilateral debt will remain untouched. “This government has a full agenda over the coming months to design and implement its comprehensive recovery plan, and conduct its public debt restructuring,” Finance Minister Ghazi Wazni said in a webcast presentation. “Our aim is to finalize this ambitious turnaround agenda before year-end 2020.” Finance ministry officials described an economy sinking deeper into turmoil, projecting a GDP contraction of 12% for 2020 and inflation topping 27%, an outlook made worse by the outbreak of coronavirus and no sign that badly needed foreign inflows would soon return. The country’s economy had already contracted by nearly 7% last year, the presentation showed. Having defaulted for the first time, the country’s dollar-denominated bonds have slumped to around 15 cents on the dollar in recent weeks, with a broader global market rout adding to the challenge facing Lebanon to turn around its economy. The presentation showed the central bank’s liquid foreign exchange reserves at $22 billion and public debt at 178% of GDP at end-2019. “Confidence in the past economic model is shattered. External and fiscal imbalances have become greater than Lebanon can bear and the complete reshaping of Lebanon’s economic and banking system...have become necessary,” said Finance Ministry Director General Alain Bifani. Bifani said reforming the country’s oversized banking sector required “disentangling” the links between cash-strapped commercial banks and the central bank after years of them funneling dollars to the central bank at sky high interest rates. The debt negotiations mark a new phase in a crisis that has seen the Lebanese pound lose more than 40% of its value since October, while hundreds of thousands of jobs have been lost and scores of businesses shut. Government officials said they were aiming for a fair and equitable treatment of creditors. Lebanon has asked creditors to register their holdings by April 17. Lebanon has appointed DF King Limited, an Orient Capital Company, to help identify holders of the country’s Eurobonds as it works out a broad debt restructuring, a finance ministry statement said on Friday. Beirut is asking that “beneficial owners or investment managers disclose their identity and holding” in order to “facilitate effective communication” between Lebanon and bond holders, the statement said. Economy minister Raoul Nehme said this month that Lebanon is waiting to see whether creditors will negotiate or take the country to court.