The International Monetary Fund (IMF) is preparing to send a high-level delegation to Lebanon once a new government is formed, marking a critical opportunity to address the country’s escalating economic crisis, sources from the IMF told Annahar.

The delegation is expected to discuss the resumption or revision of a stalled financial aid program, with the potential to increase loan amounts from $3 billion to $8 billion. However, these funds would be contingent upon stricter conditions, including enhanced public financial management, tax reforms, and solutions to Lebanon’s paralyzed banking sector.

This proposed visit comes at a pivotal moment, as Lebanon grapples with its worst economic collapse in decades. The IMF’s willingness to boost financial assistance reflects renewed optimism following the election of Joseph Aoun as President and the appointment of Nawaf Salam as Prime Minister-designate. This political breakthrough has generated hope for a functional government capable of enacting comprehensive reforms.

IMF officials have emphasized that Lebanon’s recovery depends on swift and decisive action. Since March 2023, the IMF has consistently warned of the country’s "extremely precarious" position, with mounting public debt, a collapsed currency, and a banking system that has effectively frozen depositors’ funds. In June 2023, the IMF described Lebanon’s economic situation as "severe and worsening," stressing the urgent need for reforms to avoid irreversible damage.

Economic expert Dr. Ayman Omar underscored the importance of meeting the IMF’s conditions, noting that restructuring the banking sector is crucial for restoring trust and stabilizing the financial system.

"The IMF’s willingness to increase loan amounts to $8 billion presents a significant opportunity, but Lebanon must demonstrate its commitment to transparency and sustainable fiscal policies," he told Annahar.

The IMF’s roadmap for Lebanon includes restructuring the banking sector, improving governance, combating corruption, and stabilizing public finances. Transparent management of state institutions and adherence to constitutional timelines for budget approvals are also seen as essential steps toward regaining international credibility.

Omar emphasized that the upcoming government’s reform plan should prioritize the following IMF-mandated actions:

1. Restructuring the banking sector: Addressing the issue of depositors’ funds, which the IMF sees as pivotal to economic recovery. Restoring credit access and creating new deposits would help rebuild foreign currency reserves and stabilize the monetary system.

2. Strengthening public finances: Approving budgets on time, targeting a zero-deficit policy through fiscal reforms, enhancing tax collection, and reallocating current spending to meet social and infrastructure needs. These measures would address resource and funding gaps in public finance, ensuring the delivery of essential services and capital investments.

3. Improving governance, transparency, and accountability: Increasing transparency in public sector operations, including audited financial statements of state institutions, and implementing broader public-sector reforms, particularly in the electricity sector.

4. Establishing a reliable monetary and exchange rate system: Stabilizing the currency and exchange rates to rebuild confidence in Lebanon’s monetary framework.

While the IMF is not Lebanon’s only lifeline, Omar noted, its endorsement of a credible reform program could restore trust in Lebanon’s government, financial system, and economy. This would improve the country’s credit rating with global agencies, revive confidence in government bonds—especially Eurobonds—and attract foreign investment, thereby alleviating the severe dollar shortage that directly contributed to the country’s economic collapse.