IMF Staff Country Reports

The 2003 Article IV Consultation highlights that Lebanon has been facing an unprecedented sovereign-banking-currency crisis, which is ongoing for more than three years. Although the economy showed some signs of stabilization in 2022, it remains severely depressed. The stabilization was supported by the expiration of coronavirus disease measures, a rebound in tourism, strong remittances inflows, and a gradual improvement in terms of trade in the second half of the year. The economic outlook is highly uncertain and depends on the authorities’ policy actions. Decisive implementation of a comprehensive economic recovery plan could steadily reduce imbalances and provide a policy anchor that will help restore confidence and facilitate return to growth. The report suggests monetary policy and unification of the exchange rate. The unification of the official exchange rates for current account transactions is critical to restore credibility and external viability. This needs to be supported temporarily by capital and deposit withdrawal restrictions.