IMF: Lebanon’s Economic Recovery Hinges on Comprehensive Reforms

The International Monetary Fund (IMF) said Thursday that while Lebanon’s economy showed resilience despite ongoing regional tensions, a sustainable return to growth will require sweeping structural reforms.

Speaking at a regular press briefing, IMF spokesperson Julie Kozack said tourism has contributed to a partial rebound, helping cushion the impact of prolonged instability. However, she stressed that deeper policy measures are essential to place the country on a durable recovery path.

Kozack confirmed that discussions with Lebanese authorities are continuing after Beirut formally requested an IMF-supported program in March 2025. As part of those talks, an IMF technical team visited the capital in early February to advance negotiations.

The discussions have focused primarily on two pillars, including the restructuring of  Lebanon’s banking sector, as well as designing a credible medium-term fiscal strategy.

Lebanon’s financial system has remained at the heart of its economic crisis since the 2019 collapse, which triggered severe currency depreciation, banking restrictions, and the freezing of deposits.

Earlier this year, Prime Minister Nawaf Salam said the IMF had called for amendments to a draft financial recovery law aimed at pulling Lebanon out of its worst financial crisis in history and restoring depositors’ access to funds frozen for six years.

A key component of the reform agenda is the so-called “financial gap” law, designed to allocate losses stemming from the 2019 financial collapse among the state, the Banque du Liban, commercial banks, and depositors.

IMF-backed financing remains contingent on Lebanon implementing long-delayed structural reforms, including banking sector restructuring, fiscal consolidation, and improved governance.

While tourism has provided a temporary boost, the IMF made clear that restoring sustainable growth will depend on decisive legislative and institutional action, steps widely viewed as critical to unlocking external funding and rebuilding confidence in Lebanon’s economy.