BEIRUT (Reuters) - This week will be decisive in efforts to form a new government in Lebanon, prime minister-designate Saad al-Hariri said on Tuesday, adding he was "cautiously optimistic".
Rival parties have been negotiating to form a coalition government since a national election in May, fuelling concerns that a crisis is looming for the country's heavily indebted, stagnant economy.
"Matters are positive and will become clear within two days... This week is decisive, positively or negatively," Hariri was cited as saying in a statement from his office.
On Saturday, the leader of Lebanon's powerful Iran-backed Hezbollah movement said "extraordinary efforts" were being made to form the government, but that two obstacles remained.
They are how to include a group of six Sunni lawmakers in the cabinet, and the distribution of government portfolios among the different political parties.
Credit ratings agency Moody's last week downgraded Lebanon's sovereign debt, citing the uncertain movement toward forming a government, and Lebanese bonds have suffered in recent weeks.
Lebanon is one of the world's most indebted countries and its finance minister has said it is already in an economic crisis that has started to turn into a financial one, and hopes will not become a monetary one.
(Reporting By Angus McDowall; editing by John Stonestreet)