An IMF mission led by Mr. Ernesto Ramirez Rigo recently visited Lebanon between September 22^nd and 25^th to discuss economic developments and the progress achieved on key reforms. Mr. Rigo pointed out at the end of the mission the resilience of the Lebanese economy in the face of the ongoing regional conflict, buoyed by robust diaspora tourism spending. In addition, Mr. Rigo mentioned that the authorities have succeeded in adopting a tight monetary and fiscal stance, leading to the accumulation of international reserves and a small fiscal surplus. The IMF also praised the success of the local authorities in establishing the regulatory bodies of the electricity and telecommunication sectors in a long awaited move, and that statistical capacities at the fiscal level & digital processes for tax compliance have seen major improvement. The IMF commented, however, that restoring a robust and sustainable economic growth and garnering international support for improving the economy and rebuilding war-torn areas requires the implementation of comprehensive reforms, mentioning in this regard the banking sector and the 2026 budget.

Concerning the banking sector, the IMF referred to the recent passing of the Bank Resolution Law yet noted that it needs some refinement which prompted it to submit some suggestions that would fully align it with international standards. Always in the same regard, the IMF commented that the authorities should pursue developing the strategy to recognize and allocate losses, restore the viability of the banking sector in line with international standards, protect small depositors and sustain public debt.

As far as the 2026 draft budget law is concerned, the IMF team expressed that they were expecting it to be more ambitious. In details and on the revenue front, the team revealed that while the government is correctly moving to broaden the tax base and improve compliance, further tax policy reforms should be considered to generate the necessary fiscal space to cater for essential spending on reconstruction and social protection. Always in the same vein, the IMF considered that the decision to retract excise taxes on fuel will jeopardize the government's ability to finance its commitments. As far as expenditures are concerned, the IMF insisted that all spending, including any items financed by external sources, must be transparently recorded and that spending decisions must be matched with available financing. The IMF mission also strongly urged the government to accelerate efforts toward adopting an ambitious medium-term fiscal framework in order to develop a credible strategy to restore both fiscal and debt sustainability. Finally, the IMF reiterated its commitment to supporting Lebanon in developing a comprehensive reform program that aligns with its policies and mandate.