Lebanon’s economy remains deeply strained, worsened by last year’s two-month war between Hezbollah and Israel, which inflicted severe damage on homes and infrastructure, the International Monetary Fund (IMF) has reported.
An IMF delegation recently visited Lebanon, meeting with the country’s newly elected government, led by President Joseph Aoun and Prime Minister Nawaf Salam.
In a statement following the visit, the IMF described Lebanon’s economic condition as severely depressed, with exceptionally high levels of poverty and unemployment persisting since the country’s 2019 financial crisis.
Banking Collapse and Economic Struggles
The IMF emphasized that the collapse of Lebanon’s banking sector continues to hinder economic recovery. Many depositors still lack access to their funds, further constraining economic activity and credit availability.
While recent policy measures have contributed to lower inflation and a more stable exchange rate, following the elimination of Lebanon’s fiscal deficit since mid-2023, the IMF stressed that these efforts are insufficient to resolve the country’s deep-seated financial and social crises.
Urgent Need for Reform
The IMF underscored the critical need for a comprehensive economic recovery strategy, focused on restoring growth, reducing unemployment, and improving social conditions.
“The IMF stands ready, alongside the international community, to support the Lebanese authorities in tackling these challenges,” the statement read.
A Nation in Deepening Financial Turmoil
The war between Israel and Hezbollah, which lasted from September to November 2024, further strained Lebanon’s fragile economy.
The World Bank previously described Lebanon’s financial meltdown as the worst in the country’s modern history, with public debt soaring to nearly 150% of GDP and inflation exceeding 300% in 2024.
Despite some signs of stability, Lebanon remains in urgent need of bold reforms to escape its prolonged economic crisis.
