Lebanon’s economy is in a severely depressed state, worsened by last year’s conflict. The IMF highlights exceptionally high poverty and unemployment levels, alongside a banking sector collapse that limits economic activity. Recent stability measures are insufficient, necessitating a comprehensive strategy for rehabilitation and support from the international community.
The International Monetary Fund (IMF) reported that Lebanon’s economy continues to face significant challenges, worsened by a conflict last year between Hezbollah and Israel that devastated infrastructure. An IMF team recently visited Lebanon, meeting with the newly formed government under President Joseph Aoun and Prime Minister Nawaf Salam. The IMF emphasized that poverty and unemployment are exceptionally high, a continuation of issues that began during the 2019 crisis.
The IMF highlighted that the ongoing collapse of the banking sector severely limits economic activity and access to credit for depositors, who remain unable to retrieve their funds. Although recent policies have helped stabilize the economy—evidenced by a decline in inflation and stabilization of the exchange rate after eliminating a fiscal deficit—these measures are deemed insufficient.
A comprehensive economic rehabilitation strategy is essential for restoring growth and improving social conditions in Lebanon. The IMF reiterated its commitment to work with the international community to assist Lebanese authorities in overcoming these pressing challenges. The financial crisis in Lebanon is characterized by soaring debt, reaching nearly 150% of GDP, and rampant inflation exceeding 300%.
In summary, the IMF’s assessment of Lebanon underscores a dire economic situation marked by severe poverty and high unemployment, exacerbated by past conflicts. While there are signs of stabilization, such as lower inflation, the collapse of the banking sector persists as a critical barrier to economic recovery. A detailed rehabilitation strategy is urgently needed for Lebanon to address its ongoing financial and social issues.
Original Source: www.agbi.com
