IMF visits Lebanon for first consultation since 2019

An International Monetary Fund delegation, chaired by the head of mission Ernesto Ramirez Rigo, is in Beirut this week to meet the government, central bank officials and experts for the first time since 2019.

It is part of a consultation under Article IV, which are held every year for all IMF member countries and involve assessing a country’s financial conditions, reviewing existing policies and exploring options for reform before the publication of an annual report.

The delegation has met caretaker Prime Minister Najib Mikati and his deputy Saade Chami and will present its findings at a press conference on Thursday.

Lebanon’s last report was published in October 2019, before the country plunged into an acute financial crisis that caused the value of the national currency to plummet by more than 98 per cent, locked depositors out of their savings and led to spreading poverty.

No reports were published from 2020 to 2022, as the country was negotiating with the IMF to unlock billions of dollars in a bid to ease the crisis.

This week’s visit is not directly related to the stalled negotiations with the IMF to access financial aid.

Instead, it will be part of a routine mission for all IMF member countries to assess risks to “domestic and global stability, policies and reforms to address these risks”.

Beirut signed a staff-level agreement with the IMF in April for a $3 billion loan but has been unable to enact a series of crucial reforms requested by the lender.

The banking sector and successive governments have disagreed for more than three years about how to deal with the country’s financial woes, paralysing the introduction of vital reforms and holding up negotiations with the institution.

The IMF has criticised the lack of progress with the reforms, which were agreed on under a preliminary pact.