IMF sees 'some progress' on Lebanon reforms, says external support needed
A view of the International Monetary Fund (IMF) logo at its headquarters in Washington, D.C., U.S., November 24, 2024. REUTERS/Benoit Tessier/File photo
BEIRUT - Lebanon has made progress on reforms needed to revive its economy but still has key steps to take and will need external funding on concessional terms, the International Monetary Fund said on Thursday after a week of meetings in Beirut.
Lebanon's economy went into a tailspin in late 2019, prompted by decades of profligate spending by the country's ruling elite. Reforms required to access IMF funding were repeatedly derailed by political and private interests.
Lebanon's new president and prime minister, both of whom took office in early 2025, pledged to prioritise reforms and secure an IMF financing agreement - but the country now faces additional needs with the widespread destruction and displacement caused by Israel's military campaign last year.
"The authorities have made some progress recently, including the amendment of the Bank Secrecy Law and submission of a new bank resolution law to Parliament," the IMF's Lebanon mission chief Ramirez Rigo said in a written statement.
Rigo said his mission held "productive discussions" with Lebanese officials, including on restoring the viability of the banking sector, fiscal and debt sustainability and enhancing anti-money laundering and terrorism financing measures.
He said Lebanon's medium-term fiscal framework should support the restructuring of Eurobond debts, which Lebanon defaulted on in 2020, leading to a sovereign default on its $31 billion of outstanding international bonds.
"Given Lebanon's substantial reconstruction needs, limited fiscal space and lack of capacity to borrow, the country will require significant support from external partners on highly concessional terms," the IMF statement said.
The World Bank estimated Lebanon's recovery and reconstruction needs following Israel's military campaign at $11 billion. But the U.S. has said it opposes any reconstruction funds to Lebanon until Hezbollah - the Iran-backed Lebanese armed group that fought Israel last year - is disarmed. REUTERS
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