Supervisor Elham AbolFateh
Editor in Chief Mohamed Wadie

International Report Warns of Lebanon's Disintegration

Wed 27 Jul 2022 | 03:30 PM
Ahmed Moamar

An international report issued by the Institute of International Finance warned of Lebanon's trend towards a pessimistic scenario.

Forecasts of experts warn that the Lebanese government will not implement the necessary reforms, which will cancel the agreement with the International Monetary Fund ( IMF), deplete the reserves of the Banque du Liban (Central Bank of Lebanon), and raise the debt ratio to more than 200 percent of Gross Domestic Product( GDP).

Thus, Lebanon will be classified as a failed state, as was the case of Venezuela, Somalia, and Sri Lanka recently.

The risk of Lebanon’s disintegration, in the framework of this scenario, will be very high, reinforced by the expectations of recording an additional contraction of the GDP, and a greater deterioration in the exchange rate of the lira against the US dollar to 40 thousand lires by the end of this year, and to 110 thousand lires by the end of 2026.

The report warned that the state of political paralysis that the country is going through will delay the implementation of the reforms required to release financial aid worth up to $15 billion, over a period of 4 years, from the international community, including $3 billion from the IMF, and about $12 billion in commitments from donor countries.