The International Monetary Fund (IMF) has warned that private interests in Lebanon are obstructing the implementation of necessary reforms, worsening the ongoing financial crisis and potentially leading the country towards an uncertain fate.
The IMF stated that the economic collapse that began almost four years ago has caused the local currency to lose around 98% of its value, resulted in a 40% contraction in gross domestic product, led to unprecedented inflation rates, and depleted two-thirds of the central bank’s foreign currency reserves.
These figures were part of a report by the IMF at the end of its Article IV consultations, which provide a comprehensive assessment of the financial situation in Lebanon. The IMF stated that the political crisis and resistance to implementing reforms by private interests have exacerbated the crisis, preventing necessary policy measures from being taken.
The IMF warned of the “mounting uncertainty” surrounding the economic outlook in Lebanon and urged authorities to take immediate action to address the crisis. The Fund called for reforms to the electricity sector, public procurement, and the financial sector, as well as measures to fight corruption and increase transparency.
Lebanon has been struggling with a financial crisis since 2019, which has been exacerbated by political instability, corruption, and the COVID-19 pandemic. The country’s financial crisis has led to widespread protests and violence, as well as a sharp increase in poverty and unemployment.
The IMF has been working with the Lebanese authorities to provide support and assistance, but progress has been slow due to political and economic challenges.
In conclusion, the IMF’s warning of an uncertain fate for Lebanon due to private interests obstructing necessary reforms underscores the urgent need for action to address the ongoing financial crisis.
Lebanon’s authorities must take immediate steps to address corruption and increase transparency, as well as implement reforms to the electricity sector, public procurement, and the financial sector. Failure to act risks further exacerbating the crisis and leading the country towards an uncertain future.