## Lebanon and the IMF: Frequently Asked Questions on Lebanon

## Source details

**Canonical URL:** [Lebanon and the IMF: Frequently Asked Questions on Lebanon](https://www.imf.org/en/countries/lbn/faq)

## Other formats

- [Markdown version](/en/countries/lbn/faq/index.md)
- [Structured JSON version](/en/countries/lbn/faq/index.json)
- [Bundle manifest](/en/countries/lbn/faq/bundle-manifest.json)

---

### Overview
- The IMF is ready to help Lebanon and its people overcome this unprecedented crisis, contingent on a new government that has the will and the mandate to implement the necessary comprehensive reforms.
- The challenges are described as exceptionally large, encompassing deep humanitarian, social, and economic dimensions intensified by the pandemic.

### Recent economic and social developments
- The economy has already contracted by about 30 percent since 2017 and is expected to contract further in 2021–22.
- The Lebanese lira has lost approx. 90 percent of its value.
- Food prices have increased almost ten-fold since May 2019.
- Unemployment is exceptionally high.
- Over half of households are below the poverty level.
- The pandemic continues to take a heavy toll on the economy and the population.

### Need for financial and technical assistance
- Lebanon needs significant financial and technical assistance to overcome the crisis and to initiate comprehensive reforms to:
  - bring public finances into order;
  - restructure public debt;
  - rehabilitate the banking system;
  - expand the social safety net;
  - reform state-owned enterprises (SOEs);
  - improve governance.

### Key reform priorities and policy recommendations
- Implement a comprehensive reform plan addressing unprecedented challenges, including:
  - Tackling the fundamental problem of weak governance:
    - Reforms to enhance transparency centered on strengthening the anti-corruption framework and improving SOE performance, particularly the energy sector.
    - This should include audits of the central bank and the electricity provider.
  - Implementing a fiscal strategy:
    - Combine deep debt restructuring and reforms to restore credibility, predictability, and transparency of the fiscal framework, while expanding the social safety net to protect the most vulnerable.
  - Pursuing a comprehensive restructuring of the financial sector:
    - Recognize upfront the losses at private banks and the central bank, while protecting smaller depositors.
  - Establishing a credible monetary and exchange rate system:
    - Supported by the unification of multiple exchange rates and accompanied temporarily by formal capital controls.

### SDR allocation and its intended use
- On August 2, the IMF’s Board of Governors approved a general allocation of SDRs (Special Drawing Rights) of US$650 billion, to be made available to all 190 member countries according to their quota share.
- Lebanon will receive approximately $860 million of SDRs to strengthen the country’s depleted reserves and to help with urgent needs of the Lebanese people.
- It is important that the SDR allocation help replenish depleted central bank reserves and that any use is done in a transparent and responsible manner that supports needed macroeconomic adjustment and reforms.

---


## References

- [Managing Director Kristalina Georgieva's Remarks at the International Conference in Support of the Population of Lebanon](https://www.imf.org/en/news/articles/2021/08/04/sp080421-md-remarks-lebanon-conference)

_Source: https://www.imf.org/en/countries/lbn/faq_