In its end-of-mission statement, the International Monetary Fund (IMF) indicated that it held productive discussions with the Lebanese authorities on a comprehensive economic reform program that aims to restore macroeconomic sustainability and to support financing for reconstruction. It stated that discussions covered restoring the viability of the banking sector and protecting depositors to the maximum extent possible, achieving fiscal and debt sustainability, enhancing social safety nets and rebuilding institutional capacity, establishing credible monetary and exchange rate policy frameworks, strengthening governance and transparency, enhancing the anti-money laundering and combating the financing of terrorism regime, and reforming state-owned enterprises.  Further, it considered the rehabilitation of the banking system to be a priority to rebuild confidence, shift the economy away from the prevailing cash-based transactions, and restart credit to the private sector. It pointed out that the government has made some progress recently by amending the banking secrecy law and submitting a new bank resolution draft law to Parliament, and urged the latter to enact the legislation in order to restore banking intermediation. Also, the mission said that it collaborated with the authorities on their emerging bank restructuring and deposit recovery strategy, but it noted that the strategy needs to be aligned with international standards and debt sustainability requirements.  Further, the IMF called on the authorities to mobilize public revenues and rationalize expenditures, along with improving fiscal transparency and public financial management, as part of a medium-term fiscal framework, in order to strengthen public finances and create fiscal space for increased social spending and capital expenditures. It added that the authorities must fully offset any additional expenditures in the upcoming 2026 budget through corresponding revenues, particularly by strengthening enforcement and compliance in the tax and customs administration, given the limited fiscal space and available financing. Also, it noted that the medium-term fiscal framework should support the restructuring of the Eurobonds to restore debt sustainability. It added that the country's reconstruction needs require significant support from external partners on highly concessional terms. Also, it stressed the need to improve support to Lebanon to help the country manage the ongoing challenge of hosting a large refugee population.  In parallel, the IMF expected the discussions with the authorities to continue on developing a comprehensive reform plan, and reaffirmed its commitment to supporting Lebanon, in line with its mandate and policies. (ICE BEIRUT)

Fonte notizia: Byblos Bank, June 2 - 7, 2025