IMF says more work needed for Lebanon aid deal

After two weeks of talks, the IMF said Friday it has advanced efforts to secure an aid program to help Lebanon overcome its “unprecedented and complex” economic crisis, but more work is needed.

The country will need fiscal reforms that ensure it can manage its debt load as well as measures to establish a “credible” currency system, the International Monetary Fund said in a statement at the conclusion of its virtual negotiation mission.

“During the mission, progress was made in agreeing on these necessary reform areas, although more work is needed to translate them into concrete policies,” IMF team leader Ernesto Ramirez Rigo said.

The Washington-based lender launched talks last month to pull the Middle Eastern country out of its deepening economic crisis.

In 2020, Lebanon defaulted on its sovereign debt for the first time in its history.

Its currency has lost about 90 percent of its value on the black market and four out of five Lebanese now live below the poverty line, according to the United Nations, a situation made worse by triple-digit inflation.

Ramirez Rigo said “strong upfront actions will be necessary to start turning the economy around and rebuilding confidence.”

He also urged that “decisive action by the authorities is needed to tackle the deep-seated problem of corruption.”

But any program must include a fiscal plan that “allows the government to invest in critically-needed social spending to support the people,” he added.

IMF Managing Director Kristalina Georgieva last week described the country’s situation as “very, very dire” and said that a comprehensive program was required.