An International Monetary Fund (IMF) mission headed by Mr. Ernesto Ramirez Rigo recently concluded a 4-day visit to Lebanon between March 10 and March 13. Mr. Ramirez stated in a press release that the IMF team held discussions with President Joseph Aoun, Speaker Nabih Berri, Prime Minister Nawaf Salam, Banque Du Liban, and members of the cabinet concerning their policy and reform agenda. The team welcomed the Lebanese authorities’ request for a new IMF-supported program to address Lebanon’s sizeable economic challenges.

Mr. Ramirez also mentioned that Lebanon’s economy is still “severely depressed” and that poverty and unemployment rates are alarmingly elevated since the 2019 crisis. In addition, Mr. Ramirez stated that the banking sector’s collapse is still hindering economic activity and the provision of credit. Furthermore, the destruction of houses & infrastructure, together with the displacement resulting from the conflict have further exacerbated Lebanon’s already dire economic situation and challenges. The press release also revealed that humanitarian and reconstruction needs are substantial and necessitate coordinated international support.

The press release revealed that some recent policy actions have helped preserve economic stability to a certain extent. More specifically, inflation has dropped and the exchange rate was stabilized after the elimination of the fiscal deficit since mid-2023 coupled with the ending of monetary financing to the government and foreign exchange subsidies by the Central Bank. Mr. Ramirez mentioned that revenue collection has improved despite the conflict, which has aided in supporting essential government spending, noting that public expenditure pressures increased in the second half of 2024. Mr. Ramirez highlighted in this respect that these steps are not enough to tackle the economic, financial, and social challenges Lebanon is facing, stating that a comprehensive economic strategy is required to restore growth, reduce unemployment, and improve social conditions.

From another perspective, the press release revealed that the IMF and the international community are prepared to assist the authorities in their efforts to address the aforementioned challenges. The IMF staff will remain in contact with the authorities to assist them in preparing a comprehensive economic reform program that will focus on fiscal & debt sustainability, financial sector restructuring, economic growth enablers, governance and state-owned enterprise reforms, and strengthening data provision to improve transparency and inform policymaking. Finally, the IMF thanked the Lebanese authorities and other stakeholders for their productive engagement and cooperation during the mission.