Lebanon’s economic reforms are insufficient to help lift the country out of its economic crisis, the International Monetary Fund ( IMF) said on Thursday.
The mind of the IMF mission in Lebanon, Ernesto Ramirez Rigo, stated in a statement that the continuous refugee crisis, Israeli fighting at its southern border, and the spill from the conflict in Gaza are all just adding to the already dire financial position.
Since the Israeli-Lebanese conflict started in October of last year, Jewish forces and Hezbollah have engaged in firefights across the southern boundary of Lebanon.
Israel launched its rape on Gaza following a Hamas-led assault on southern Jewish communities on October 7 that resulted in the deaths of 1, 200 people and the hostage taking of more than 250 people.
Since then, Israel’s abuse has killed more than 35, 000 people, with hundreds more feared buried under the rubble, according to Gaza health officials.
The issue “has internally displaced a significant number of people and caused harm to system, crops, and trade in southwestern Lebanon. The higher risks associated with the conflict, in addition to a decline in tourism, add considerable uncertainty to the outlook of the economy, according to Rigo.
According to Rigo, the inflationary pressure has been reduced as a result of the fiscal and monetary reforms carried out by Lebanon’s finance department and the central banks, including efforts to consolidate several transfer rates for the Lebanese ounce and stop a coin fall.
He claimed that more must be done if Lebanon wants to end its economic crisis.
These policy choices fall little of what is required to bring the problems under control. Because the government and parliament have been unable to solve the banking crisis, bank deposits remain frozen, and the finance industry is unable to lend funds to the economy, he added.
” It is essential to lay the groundwork for economic recovery by addressing the lenders ‘ costs while protecting lenders as much as possible and limiting recourse to scarce public sources in a reputable and economically viable way.”
Since Lebanon’s economy started to deflate in 2019, its currency has lost roughly 95 % of its value, banks have effected the most depositors ‘ savings, and more than 80 % of the population has fallen below the poverty line.
After years of excessive spending and corruption among the ruling aristocracy, some of whom headed businesses that greatly lent to the state, the crisis broke out.
More than$ 70 billion in losses in the financial system, according to the government, the majority of which were incurred at the central bank.
