IMF Warns Lebanon That the Country Is Still Facing Enormous Challenges, Years After a Meltdown Began

Four years after Lebanon’s historic meltdown began, the small nation is still facing “enormous economic challenges,” with a collapsed banking sector, eroding public services, deteriorating infrastructure and worsening poverty, the International Monetary Fund warned Friday, the Associated Press reported. In a statement issued at the end of a four-day visit by an IMF delegation to the crisis-hit country, the international agency welcomed recent policy decisions by Lebanon's central bank to stop lending to the state and end the work in an exchange platform known as Sayrafa. Sayrafa had helped rein in the spiraling black market that has controlled the Lebanese economy, but it has been depleting the country's foreign currency reserves. The IMF said that despite the move, a permanent solution requires comprehensive policy decisions from the parliament and the government to contain the external and fiscal deficits and start restructuring the banking sector and major state-owned companies. In late August, the interim central bank governor, Wassim Mansouri, called on Lebanon's ruling class to quickly implement economic and financial reforms, warning that the central bank won’t offer loans to the state. He also said it does not plan on printing money to cover the huge budget deficit to avoid worsening inflation. Read more.