The IMF reports severe depression in the Lebanese economy, exacerbated by the recent war and ongoing poverty and unemployment. Despite recent policy actions stabilizing some economic factors, significant challenges remain. The IMF calls for a comprehensive strategy for economic rehabilitation and stands ready to assist.
The International Monetary Fund (IMF) has reported that the Lebanese economy remains in a state of severe depression. This situation has deteriorated further due to a two-month war in 2022 between the Iranian-backed Hezbollah group and Israel, which resulted in significant damage to infrastructure and homes. An IMF team visited Lebanon to engage with the newly formed government under President Joseph Aoun and Prime Minister Nawaf Salam, assessing the economic conditions.
The IMF’s recent report highlights that both poverty and unemployment levels are exceptionally high following the crisis in 2019. Additionally, the collapse of Lebanon’s banking sector continues to obstruct economic growth, preventing depositors from accessing their funds. Despite some recent policy measures that have stabilized inflation and the exchange rate, these initiatives are viewed as inadequate in tackling the broader economic and financial challenges confronting the nation.
The IMF emphasized the urgent need for a comprehensive strategy aimed at economic rehabilitation, which would be essential for spurring growth, reducing unemployment, and ameliorating social conditions in Lebanon. The organization stands ready to assist alongside the international community to address these pressing issues effectively. Even as the government seeks paths to renewal, the ramifications of the financial crisis remain stark, with public debt soaring to nearly 150 percent of the country’s gross domestic product and hyperinflation exceeding 300 percent, a reflection of the deepest financial crisis in Lebanon’s history.
In conclusion, the IMF’s findings underscore the dire state of the Lebanese economy, marked by extraordinarily high poverty and unemployment rates along with a crumbling banking sector. While some steps have been made towards economic stabilization, substantial efforts remain necessary to ensure sustainable recovery. A cohesive and targeted economic strategy is critical for Lebanon to overcome its existing challenges and foster growth, with the support of the international community being paramount during this rehabilitation phase.
Original Source: www.agbi.com
