On Thursday, the International Monetary Fund (IMF) spoke about its negative and gloomy outlook for the Lebanese economy, expecting that the country will not emerge from its worsening financial crisis without reforms, and thus the trend towards more inflation, according to the Associated Press.
Since late 2019, Lebanon has been suffering the consequences of the worst economic crisis in its modern history as a result of decades of corruption and mismanagement by the political class that ruled the country since the end of the civil war between 1975 and 1990.
Three-quarters of Lebanon’s population of more than 6 million, including a million Syrian refugees, now live in poverty and hyperinflation is rising.
The head of the International Monetary Fund mission, which is currently visiting Lebanon, Ernesto Ramirez Rigo, held a press conference, Thursday, at the end of their nine-day visit.
He said the continued inaction of Lebanese leaders would leave the country in an “endless crisis” and high inflation would affect the lives of many Lebanese for years to come.
The IMF visit came as negotiations with Lebanese officials over a much-needed bailout package are stalled.
Since reaching a preliminary agreement with the International Monetary Fund nearly a year ago, Lebanese officials have made limited progress on the reforms needed to seal the deal, which include restructuring the country’s debt and ailing banking system, overhauling a barely functioning public electricity system, and making governance reforms. Associated Press.
The agency stated that this visit is part of a series of regular assessments conducted by the International Monetary Fund for all member states, and was not directly related to the negotiations for the bailout loan.
But Rigaud expressed frustration at the slow rate of progress on the reforms required to reach an agreement. He denied that the IMF would consider canceling the deal completely.
“There is no deadline, and we will never withdraw from our member states,” Rigaud said. “However, we were expecting a lot in terms of implementation.”
Rigaud noted that even legislation passed to enact reforms has fallen short in some cases.
He added that the amendments to the country’s banking secrecy law, which were approved last October, aim to facilitate accountability in the financial sector, but the draft capital controls law does not meet the requirements of the International Monetary Fund.
