IMF says Lebanon needs urgent economic reforms to halt ‘deepening crisis’

Lebanon must take urgent action on economic reforms to avoid “irreversible consequences” for its economy, the International Monetary Fund (IMF) said Thursday.

IMF staff concluded a consultation with Lebanese authorities on June 1, spokesperson Julie Kozack told reporters, in which it was concluded that reforms were urgently needed to arrest the “severe and deepening crisis” facing the country’s economy.

"Lebanon needs urgent action to implement a comprehensive economic reform program to arrest the severe and deepening crisis and to allow Lebanon's economy to recover," Kozack said. 

"We are concerned about irreversible consequences for the economy, especially for the poor citizens of Lebanon and the middle class," she added.

Kozack noted that the IMF remained engaged and was willing to support Lebanon, but the country would also need strong financial support from the broader international community in the coming years. To that end, it was critical that Beirut secure broad political support to implement the economic reforms that were agreed with the IMF in April 2020 to end the current crisis, she said.

Lebanon has had no head of state since former president Michel Aoun's term ended last October, deepening institutional paralysis in a country where one of the world's worst economic crises has been festering for years.

Pro-Iranian Hezbollah, the country's main armed political force, and its Shiite ally Amal, had backed Suleiman Franjieh, heir of an old Lebanese Christian political dynasty and an ally of Syrian President Bashar al-Assad with strong ties to the ruling political establishment in Damascus.