Lebanon says IMF ‘only way’ for exiting economic crisis

BEIRUT, Lebanon

Lebanon’s caretaker Prime Minister Hassan Diab hinted Tuesday that the International Monetary Fund (IMF) may be the only way for his country's exit from its economic crisis.

Diab issued a statement marking one year after the resignation of his government in the wake of a massive explosion that rocked the Port of Beirut.

“One year has passed since the resignation of the government, and the country is still reeling under the weight of a deep crisis,” the caretaker premier said.

“The Lebanese are enduring considerable suffering, while full-year efforts have not succeeded in forming a government that would resume negotiations with the International Monetary Fund, which seems to be the only path available at the moment to get out of the state of collapse.”

In May, the IMF said it was willing to engage in technical discussions to help Lebanon out of its financial and economic crisis, after those discussions had stopped following the port blast.

“When our government resigned, negotiations with the IMF had gone a long way in reaching an understanding on the recovery plan that we had elaborated; however, the ominous Beirut port’s blast has led to the resignation of the government. Thus, negotiations stopped, and all the elements of financial, economic and social resilience collapsed in light of a complete external economic and financial assistance cut off, for most of the aid provided to Lebanon was limited to dealing with the repercussions of August 4 explosion,” Diab said.

“We have done everything we can, but any government in place will not be able to address the structural crisis without external assistance and a practical plan, so how can a caretaker government deal with this crisis?"

Lebanon is facing a severe economic crisis, with the local currency losing nearly all of its value against the dollar, with streets witnessing massive protests and rallies.

The country’s foreign exchange reserves dropped from $38 billion in 2019 to around $16 billion.

*Bassel Barakat contributed to this report from Ankara