The International Monetary Fund will send its team to Lebanon the following week for crucial discussions with the newly formed government. This may turn a corner in the country’s protracted economic plight. IMF communications director Julie Kozack said on Thursday that the March 10-14 “fact-finding” mission would assess the economic situation of Lebanon and review reconstruction needs during the shaky ceasefire between Israel and Hezbollah.
Speaking to journalists in Washington, Kozack hinted at the possibility of a fresh financial package, noting that “future next steps could include helping the authorities to formulate a comprehensive economic reform program.”
The visit comes at a critical juncture for Lebanon, which has finally established a functioning government after operating under caretaker leadership for more than two and a half years. Prime Minister Nawaf Salam formed his cabinet last month, offering a glimmer of hope to a population battered by economic hardship.
Among Salam’s key appointments was Yassine Jaber, who takes charge of the finance ministry after previously serving as economy and transport minister. Jaber faces the daunting task of navigating potential economic reforms that, while painful, could unlock desperately needed financial support from international institutions.
“This is potentially a watershed moment for Lebanon,” said Beirut-based economist Hassan Khalil, who was not involved in arranging the IMF visit. “The new government must decide whether to embrace difficult reforms or continue down the same path that led to our current crisis.”
Lebanon’s economy has been in free fall for years, with accusations of corruption and mismanagement plaguing successive administrations. The currency has crashed by over 95% since 2019, as basic services have experienced a noticeable decrease in quality and unemployment levels have hit an all-time high.
These updates by the government have been the first signs of improvement on that front for many people, including Maya Khoury, a 42-year-old English teacher in Beirut.
“We’ve heard promises before,” she said. “But perhaps this time, with international pressure and a new government, something might actually change.”
The IMF delegation will face complex challenges during their visit, including assessing how the ongoing regional conflict has affected Lebanon’s already fragile economy. The shaky ceasefire between the Israel and Hezbollah continues to face regular violations which endanger potential economic advancement.
The IMF support faced continual setback because government officials could not overcome political gridlock nor did they convince powerful stakeholders to agree with reforms. The banking industry resists reforms that would oblige it to take on major financial losses of its own.
Experts from the region argue that IMF reengagement demonstrates international acknowledgment of the reform-oriented skills displayed by Prime Minister Salam. The new government will experience substantial challenges when applying the possible Fund recommendations that involve banking sector restructuring and subsidy reduction as well as improved fiscal management.
The result of the upcoming IMF mission will decide if Lebanon will start coming back from economic collapse or its problems will become more severe.
