An International Monetary Fund (IMF) mission is set to arrive in Lebanon this week for a fact-finding visit, marking the first step in re-engaging with the country’s newly elected president and government. The visit is expected to lay the groundwork for fresh negotiations aimed at securing a comprehensive economic reform plan.

The mission takes on added significance in light of reform commitments made by President Joseph Aoun in his inaugural address and echoed in the government’s policy statement. Prime Minister Nawaf Salam and key ministers have also reaffirmed their intent to push forward with economic rescue measures. Meanwhile, IMF Managing Director Kristalina Georgieva has expressed her satisfaction with Lebanon’s recent institutional progress, including the restoration of constitutional order. She also signaled her intention to visit Beirut soon.

Asharq Al-Awsat newspaper cited sources as indicating that negotiations between Lebanon and the IMF will soon resume, with the government expected to appoint a negotiating team led by Deputy Prime Minister Tarek Mitri. Finance Minister Yassine Jaber, Economy Minister Amer Bsat, and acting Central Bank Governor Wassim Mansouri are also expected to play key roles. The private sector and banking industry will likely be involved in an advisory capacity.

A senior financial official said a final agreement with the IMF, which may include an increase in the originally proposed $3 billion funding package, could be reached within months—potentially before summer. Preliminary discussions have already made progress, particularly on abandoning previous proposals that would have disproportionately affected depositors. A controversial plan to erase the majority of banks’ $80 billion in deposits at the Central Bank to cover a $72 billion financial gap has been scrapped.

Lebanon’s previous government had failed to secure a final agreement with the IMF despite signing a staff-level deal in April 2022 for a four-year, $3 billion Extended Fund Facility (EFF). That agreement was contingent on a series of legislative and policy measures designed to stabilize the economy, enhance governance, and restructure external debt to restore financial sustainability.

A shift in the IMF’s stance has been noted following the Lebanese government’s insistence on protecting depositors from bearing the brunt of the financial crisis. This position has gained urgency as Lebanon faces additional economic and reconstruction costs stemming from the ongoing war with Israel. The World Bank estimates that reconstruction efforts will require approximately $11 billion.

Discussions are expected to center on a revised financial recovery plan. The new approach will likely involve restructuring the banking sector, implementing mechanisms for the gradual repayment of frozen deposits, and redistributing losses in a way that holds various stakeholders accountable. The plan will also focus on verifying the legitimacy of funds, auditing public finances, reassessing consumer subsidies, and scrutinizing past financial transactions conducted through the Central Bank’s now-defunct "Sayrafa" exchange platform.

The IMF mission is expected to welcome the government’s swift implementation of legal and executive measures in its first month in office. These steps include reforms to address public debt, judicial independence, and regulatory appointments for critical sectors such as electricity, aviation, and telecommunications. Efforts to secure Lebanon’s borders and curb smuggling and drug trafficking have also been viewed as positive developments.

While the IMF has acknowledged some progress in Lebanon’s fiscal and monetary policies, structural reforms remain largely unaddressed. The Finance Ministry and Central Bank have taken steps to stabilize the currency, reduce inflation, and eliminate budget deficits through stricter monetary policies. Measures such as phasing out monetary financing of government spending, unifying exchange rates, and improving tax revenue collection have been implemented.

However, the IMF remains concerned about governance and transparency. Internal oversight at the Central Bank has improved, but broader reforms—such as publishing audited financial statements of state-owned enterprises and restructuring the public sector—are still lacking. The quality and availability of economic data remain inadequate, complicating policy planning.

Despite these efforts, the IMF believes Lebanon’s reform measures remain insufficient for a full economic recovery. The informal economy continues to expand, raising concerns about regulatory oversight. Meanwhile, frozen bank deposits and the unresolved banking crisis have left the financial sector unable to provide credit, further stalling economic activity. Unless Lebanon implements meaningful reforms, economic stagnation and financial instability will persist, delaying any hope of long-term recovery.

This is an English adaptation of an Arabic article published in Asharq Al-Awsat.