IMF: Lebanon in ‘Very Dangerous Situation’ With Reforms Stalled

BEIRUT (Reuters) —
International Monetary Fund’s Mission Chief to Lebanon Ernesto Rigo, attends a news conference in Beirut, Lebanon, March 23, 2023. (REUTERS/Mohamed Azakir)

The International Monetary Fund on Thursday warned that Lebanon was in a very dangerous situation one year after it committed to reforms it has failed to implement and urged the Lebanese government to halt borrowing from the central bank.

IMF mission chief Ernesto Rigo told a news conference in Beirut that the authorities should accelerate the implementation of conditions set for a $3 billion bailout.

“One would have expected more in terms of implementation and approval of the legislation,” related to reforms, he said, noting “very slow” progress.

“Lebanon is in a very dangerous situation,” he said.

Lebanon signed a staff-level agreement with the IMF nearly one year ago but has not met the conditions to secure a full program that is widely seen as crucial for its recovery from one of the world’s worst financial crises.

The economy has meanwhile been crippled by the collapse of the currency, which has lost some 98% of its value against the U.S. dollar since 2019, triggering triple-digit inflation, soaring poverty and a wave of emigration.

The crisis erupted in 2019 after decades of profligate spending and corruption among the ruling elites, leading banks that lent heavily to the state to restrict access to savings.

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