Lebanon to Approve Fiscal Gap Law to Unlock IMF Help and Debt Deal
Lebanon is close to approving a new fiscal gap law, a key step to fix its broken financial system and restart talks with the International Monetary Fund (IMF). Economy Minister Amer Bisat said on Wednesday that the Cabinet is expected to approve the law soon and send it to Parliament for final approval.
IMF Reform Push
The law is important for Lebanon to move forward with an IMF program and to begin restructuring its huge public debt, which is now more than $100 billion. The country has been suffering from one of the world’s worst economic crises.
Bisat said Lebanese officials are in daily contact with the IMF as they work to complete long-delayed reforms. Speaking in Washington during the IMF and World Bank meetings, he said the plan is to present the law to the Cabinet, approve it, and then send it to Parliament “soon.”
The new law will decide how Lebanon’s financial losses will be divided among the government, central bank, commercial banks, and depositors. These losses came after years of mismanagement that led to the 2019 financial collapse, when many Lebanese people lost access to their savings.
Bisat said the government wants to make a strong and fair law, not a rushed one, explaining that “it’s better to get it right than to get it fast.”
Recovery Principles
Bisat said the plan is based on three main ideas:
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Depositors will get their money back over time, without losing part of it.
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Smaller deposits will be paid first.
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The banking sector must return to full strength.
He described Lebanon’s relationship with bondholders—investors still waiting for repayment on Lebanon’s defaulted bonds—as “good and positive.”
Bisat, who previously worked at BlackRock, said that better regional stability and security could help Lebanon recover faster. The government also plans to hold an investor conference in November, called “Beirut One,” to attract private investment.
Key Background
Experts warn that Lebanon’s current recovery plans may not fully meet IMF conditions and could protect banks from responsibility. The fiscal gap law aims to distribute about $70 billion in financial losses between the state, central bank, and depositors, giving priority to smaller savers who should be repaid within five years.
Some ideas include creating “asset-backed bonds” linked to Lebanon’s $30 billion in gold reserves, though critics say this could harm future generations.
Since the 2019 crisis, Lebanon’s GDP has dropped to $28 billion, debt has grown to 164% of GDP, and inflation remains near 45%.
Even though there are signs of progress, the recovery is still weak. Prices of Lebanon’s defaulted bonds have risen slightly due to investor hope, but experts say real improvement will only come with credible reforms and IMF support. Without them, Lebanon could stay stuck in economic crisis.
Published: 16th October 2025
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