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IMF describes Lebanese crisis as ‘unprecedented and complex’

Lebanese crisis

Beirut, (Business News Report)|| The International Monetary Fund (IMF) has described the Lebanese economic and financial crisis as “unprecedented and complex”, stressing that it will remain in close contact with Lebanon to help it.

The IMF stressed that Lebanon needs to formulate a reform program to help it overcome its crises.

Since the second half of 2019, Lebanon has been experiencing economic and living crises, the severity of which has increased over time, and it has become under the weight of debt after the collapse of its financial system.

Within two and a half years, the lira had fallen more than 90 percent and the majority of the population had fallen into poverty.

At the conclusion of more than two weeks of online discussions with officials, IMF said in a statement that Lebanon is facing an “unprecedented and complex” crisis that requires a comprehensive economic and financial reform program.

“The team will remain closely engaged, and discussions are continuing, to help the authorities formulate a reform program that can address Lebanon’s economic and financial challenges,” he added.

“The economic recovery plan is not easy…We think it is a difficult process, a Kamikaze operation,” Lebanese Prime Minister Najib Mikati said in a televised news conference after the cabinet approved the 2022 state budget.

The plan also aims to address a $70 billion gap in the financial system.

“Progress was made during the mission in agreeing on the necessary reform areas, and more work is needed to translate them into concrete policies,” the IMF statement said.

Earlier, the World Bank accused “influential leaders” in Lebanon of deliberately creating a crisis in the Lebanese economy.

The bank said in a report that there are officials behind the severe crisis that the Lebanese economy is currently witnessing, and the poor and middle groups are bearing the brunt of the crisis.

Whereas, the World Bank expected real GDP to decline in 2021 by 10.5%, following a contraction of 21.4% in 2020.

The bank indicated that the value of the country’s gross domestic product decreased from nearly $52 billion in 2019 to about $21.8 billion by the end of 2021, recording a contraction of 58.1%, which is the most severe contraction in a list of 193 countries.

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