IMF: Permanent solution requires comprehensive decisions to contain deficits and start the restructuring of the banking system

IMF: Permanent solution requires comprehensive decisions to contain deficits and start the restructuring of the banking system

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2023-09-15 | 09:47

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IMF: Permanent solution requires comprehensive decisions to contain deficits and start the restructuring of the banking system

A recent visit by an International Monetary Fund (IMF) delegation, led by Mr. Ernesto Ramirez Rigo, to Beirut from September 11 to 14, focused on discussions surrounding Lebanon's current economic status and the progress made in implementing crucial reforms. 

Following the mission, Mr. Ramirez Rigo issued the following statement:

Lebanon's economic future looks bleak due to its failure to initiate urgently needed reforms. The absence of political determination to make tough yet essential decisions for reform has left Lebanon grappling with a crippled banking sector, insufficient public services, deteriorating infrastructure, escalating poverty and unemployment rates, and a widening income disparity. Inflation continues to soar into triple digits, further squeezing the real income of its citizens. 

Moreover, foreign exchange (FX) reserves have dwindled significantly during the first half of this year, partly due to Banque du Liban's (BDL’s) involvement in quasi-fiscal operations and a substantial current account deficit.

While there has been a temporary boost in tourism during the summer months, resulting in increased FX inflows, it is unlikely to be a sustainable solution. This might create an illusion that Lebanon has emerged from its crisis,