After two weeks of talks between the IMF and Lebanon, the IMF expressed that it has advanced efforts to secure an aid program to help Lebanon overcome its “unprecedented and complex” economic crisis, but that more work is needed.
As per the IMF, Lebanon will need economic reforms that ensure debt management as well as measures to establish a “credible” currency system.
“During the mission, progress was made in agreeing on these necessary reform areas, although more work is needed to translate them into concrete policies,” IMF team leader Ernesto Ramirez Rigo said at the end of IMF’s virtual mission on Lebanon.
Rigo also expressed that strong actions will be necessary to start turning the economy around and rebuilding confidence and urged to devise action by Lebanese authorities to tackle the problem of corruption.
But any program will and must include a financial plan that “allows the government to invest in critically-needed social spending to support the people,” commented the IMF Team Leader.
The Washington-based lender re-launched talks with Lebanon last month to pull the country out of its economic “vacuum” and to put the country on the safe track again.
Lebanon’s currency has lost more than 80 percent of its value on the black market and, according to the United Nations, four out of five Lebanese now live below the poverty line.
The collapse, which started between 2019 and 2020, compelled Lebanon to default on its sovereign debt for the first time in its history. It has materialized into the world’s worst economic meltdown since the 1850s, forcing millions of people in Lebanon to live in poverty.
Just last week, the IMF Managing Director Kristalina Georgieva described the country’s situation as “very, very dire” and said that a comprehensive program was required to help Lebanon and the Lebanese people.