Lebanon’s government will discuss a new plan with the IMF to fix its financial crisis and debt
Lebanon’s government will talk with the International Monetary Fund (IMF) to help fix the country’s financial problems and debt.
IMF Program
The Lebanese government plans to rebuild the country’s economy, but first, it must fix the banking sector, according to a statement approved on Monday.
The statement also says Lebanon needs a security plan and a foreign policy that keeps the country out of conflicts.
The government aims to restart oil and gas exploration and plans to create a Ministry of Technology and Artificial Intelligence (AI).
With a new government now in place in Syria, Lebanon sees a chance to start talks about controlling its borders and addressing the issue of Syrian refugees.
The IMF has offered to help Lebanon but warned that the challenges are very difficult. Lebanon’s situation improved after the election of President Joseph Aoun and Prime Minister Nawaf Salam last month.
What to Expect
Lebanon’s finance minister, Yassine Jaber, said an IMF team is expected to visit in March. Jaber, who joined the government this month, has already met with the IMF’s resident representative, Frederico Lima.
In 2022, Lebanon reached a draft funding deal with the IMF, but it depended on reforms that the government did not carry out. However, Jaber said the new government is committed to moving forward with these changes.
Lebanon’s Economy
Lebanon’s economy shrank by about 6.6% in 2024 due to the Israel-Hezbollah conflict. Since 2019, the economy has shrunk by 38%, according to the World Bank. The crisis is caused by displacement, destruction, and reduced spending.
The World Bank expects Lebanon’s economy to shrink by another 5.7% in 2024, leading to a $4.2 billion loss in spending and exports.
Lebanon’s financial situation may get worse because the government needs more money for essential services while collecting less revenue.
Since Lebanon defaulted on its debt, it cannot access international loans. The World Bank says Lebanon must restructure its debt and make smart investments to rebuild and support long-term reforms.
Published: 19th February 2025
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