Technical discussions between Lebanon and the International Monetary Fund (IMF) are set to be held in the “coming days” to take on the country’s dire economic crisis.
The IMF’s spokesperson for the MENA region told an international news channel that they received a letter from Lebanese Prime Minister Najib Mikati expressing their interest in a Fund programme.
Earlier, the Lebanese finance ministry issued a statement announcing it has “resumed interactions” with the international organization.
“The newly formed government led by Najib Mikati is aware of the urgency of Lebanon’s social and economic situation and of the challenges lying ahead,” the statement read.
Lebanon’s financial and economic meltdown has pulled approximately three-quarters of the population into poverty, and devalued the Lebanese pound by about 90 percent in less than two years.
The new Lebanese cabinet is the country’s first full-fledged government in more than a year, and the three-time Prime Minister said resuming talks with the IMF is a key priority for his tenure.
Previously, in July 2020, negotiations between the two sides fell apart after parliamentarians and Lebanon’s banks opposed the former government’s bailout plan, and disagreed on the value of the nation’s financial losses. Even though the IMF approved the government’s plan and figures, which requested a loan of $10 billion at the time, they wanted to lower those numbers.
Local media reported Mikati intends to restart negotiations for a bailout package in the coming weeks, but the Lebanese government needs first to update its economic recovery plan.
The international community considers an IMF recovery package not just a key financial lifeline for Lebanon, but a prerequisite for development aid. In order to end wasteful spending, combat rampant corruption and financial crimes, as well as implement transparency and accountability mechanisms, they have urged Lebanese authorities to reform the economy.