Lebanon: 2019 Article IV Consultation-Press Release; Staff Report; Informational Annex; and Statement by the Executive Director for Lebanon
IMF Staff Country Reports, October 17, 2019
Source details
- Canonical URL
- Lebanon: 2019 Article IV Consultation-Press Release; Staff Report; Informational Annex; and Statement by the Executive Director for Lebanon
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Bibliographic details
- Published: October 17, 2019
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9781513517049.002
Executive summary and macroeconomic assessment
- Lebanon’s economic position continues to be very difficult, with very low growth, high public debt and large twin deficits.
- Financial stability has been maintained, but deposit inflows, critical to finance the budget and external deficits, slowed down during the past year, reducing the authorities’ room for manoeuvre.
- The new government has taken some important policy steps to start the needed policy adjustment, which could help raise confidence among investors and donors.
- The highest priority is the implementation of a sustainable fiscal adjustment that will bend down the path of the public debt-to-gross domestic product ratio through a combination of revenue and expenditure measures.
- Fiscal adjustment needs to be complemented by structural reforms and concessionally financed investment to raise Lebanon’s growth potential and help external adjustment, as well as policies to build further buffers in Lebanon’s financial sector.
Key policy recommendations and reform priorities
- Implement a sustainable fiscal adjustment combining revenue and expenditure measures to alter the public debt-to-gross domestic product trajectory.
- Prioritize structural reforms to:
- Reform the electricity sector.
- Remove impediments to and lower the cost of doing business.
- Improve governance and reduce corruption.
- Mobilize concessionally financed investment to boost growth potential and assist external adjustment.
- Adopt policies to build further buffers in the financial sector.
Contextual and operational notes
- Deposit inflows are critical to finance the budget and external deficits; their recent slowdown constrains policy options.
- Restoring investor and donor confidence depends on credible and timely implementation of fiscal and structural measures.
Subjects and keywords
- Subject: Budget planning and preparation, Commodities, Electricity, National accounts, Public debt, Public financial management (PFM), Revenue administration
- Keywords: bridge loan, budget measure, Budget planning and preparation, CR, deficit, donor disbursement, Electricity, expenditure measure, Global, government, government infrastructure, ISCR, Middle East, power sector reform agenda, staff appraisal
IMF Staff Country Reports — Lebanon: 2019 Article IV Consultation-Press Release; Staff Report; Informational Annex; and Statement by the Executive Director for Lebanon (October 17, 2019).
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