Lebanon and the International Monetary Fund (IMF) have agreed to accelerate their ongoing discussions, with a second round of negotiations set for next month in Beirut, followed by a third round in Washington. 

Sources participating in the talks confirmed to Asharq Al-Awsat that the mutual evaluation meeting, held Thursday evening at Lebanon's Ministry of Finance, concluded with an agreement to immediately initiate a work program based on updated data collected by the IMF mission. The Lebanese side is also expected to complete urgent administrative appointments to ensure progress toward drafting an updated initial agreement for the next round of negotiations. The goal is to present the main provisions of the agreement to the IMF’s senior management during Lebanon’s participation in the IMF and World Bank’s spring meetings in Washington.

The IMF also reiterated the importance of appointing a permanent governor for Lebanon’s central bank and the establishment of a unified data and statistics center for the Ministry of Finance.

The IMF delegation, led by Ernesto Ramirez-Rigo, reportedly demonstrated flexibility not typically seen in previous rounds of negotiations, showing an understanding of Lebanon’s political and economic realities. 

In a statement, the IMF noted that “recent political measures have helped maintain a degree of economic stability,” and it welcomed Lebanon’s request for a new IMF-supported program to help address the country’s massive economic challenges. The IMF also acknowledged Lebanon’s humanitarian needs and the enormous reconstruction efforts required, estimating that international support will be needed for these efforts.

Importantly, the discussions avoided prematurely specifying the amount of credit facilities that the IMF would provide upon finalizing the "renewed" agreement. Sources suggested that the financial assistance would be contingent on ongoing developments, particularly the urgent need for reconstruction after the recent conflict, which the World Bank has estimated at $11 billion. This adds to the original fiscal gap of approximately $72 billion, which the previous Lebanese government had failed to address in line with the terms of the 2022 preliminary agreement with the IMF, which had set out a financial aid package of $3 billion over four years.

The IMF also lauded Lebanon’s progress in reducing inflation and stabilizing the exchange rate, aided by the cessation of central bank financing and the removal of subsidies on foreign currencies since mid-2023. Additionally, despite the war, Lebanon has made strides in improving revenue collection, helping to sustain essential public spending. However, the IMF warned that these measures are still insufficient to address the country’s ongoing economic, financial, and social challenges.

The collapse of Lebanon's banking sector remains a major obstacle to economic recovery. According to the IMF, the banking crisis continues to hinder credit access, and depositors are still unable to access their funds. Finance Minister Yassine Jaber reassured that a plan, aligned with IMF recommendations, is in place. This plan prioritizes addressing the issues of small depositors, who represent 84% of total accounts. It proposes a comprehensive schedule for deposit recovery, without discrimination between Lebanese and foreign depositors.

In parallel with addressing the banking crisis, the IMF delegation outlined critical targets for Lebanon’s economic recovery, including the restructuring of the financial sector. The IMF’s plan calls for the establishment of a reliable and transparent currency and exchange system, ensuring that banks can resume operations and efficiently allocate resources to support the recovery.

Additionally, the IMF is pushing for fiscal policies that maintain sustainable debt levels while allowing for investments in social spending, reconstruction, infrastructure, and state-owned enterprise reforms, particularly in the energy sector. The IMF also stressed the need for strengthening governance frameworks, tackling corruption, and combating money laundering and terrorism financing.