EU Delegation: Lebanon Has Made ‘Only Limited Progress’ on Reforms

Lebanon's caretaker Prime Minister Najib Mikati heads a cabinet meeting, at the government palace in Beirut, Lebanon April 4, 2024. REUTERS/Mohamed Azakir
Lebanon's caretaker Prime Minister Najib Mikati heads a cabinet meeting, at the government palace in Beirut, Lebanon April 4, 2024. REUTERS/Mohamed Azakir
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EU Delegation: Lebanon Has Made ‘Only Limited Progress’ on Reforms

Lebanon's caretaker Prime Minister Najib Mikati heads a cabinet meeting, at the government palace in Beirut, Lebanon April 4, 2024. REUTERS/Mohamed Azakir
Lebanon's caretaker Prime Minister Najib Mikati heads a cabinet meeting, at the government palace in Beirut, Lebanon April 4, 2024. REUTERS/Mohamed Azakir

The Delegation of the European Union to Lebanon said Friday that the country has made “only limited progress” since April 2022 when it agreed on a program of actions and reforms with the International Monetary Fund (IMF).

“Its implementation would have unlocked over $3 billion in assistance, additional support from donors, put Lebanon back on the path of economic recovery and restored its international credibility,” the EU delegation said in a statement.

“Unfortunately, since then, only limited progress has been made,” it said.

According to the statement, the situation in Lebanon “could and should serve as a driver for change.”

It said it was “critical” to elect a president and form a fully functioning government. “But a delay should not hinder the implementation of agreed key reforms, in order to restore the trust of international actors and Lebanese citizens in the financial system.”

“The adoption of the 2024 budget within constitutional deadlines, the reforming of the bank secrecy law and the stabilization of the exchange rate, have shown that where there is a will, there is a way,” said the statement.

The delegation stressed that structural reforms are necessary to avoid the country being trapped in a perpetual cycle of crises.

“Decisive leadership is needed. The answers to Lebanon’s economic crisis can only come from within Lebanon,” it said.

“The time to act is - always – now,” the statement added.



Egypt's Central Bank Leaves Key Interest Rates Unchanged

A general view of Dahab Island or Gold Island (Gezirit el-Dahab) in the middle of the Nile River in Cairo, Egypt, July 2, 2024. REUTERS/Amr Abdallah Dalsh
A general view of Dahab Island or Gold Island (Gezirit el-Dahab) in the middle of the Nile River in Cairo, Egypt, July 2, 2024. REUTERS/Amr Abdallah Dalsh
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Egypt's Central Bank Leaves Key Interest Rates Unchanged

A general view of Dahab Island or Gold Island (Gezirit el-Dahab) in the middle of the Nile River in Cairo, Egypt, July 2, 2024. REUTERS/Amr Abdallah Dalsh
A general view of Dahab Island or Gold Island (Gezirit el-Dahab) in the middle of the Nile River in Cairo, Egypt, July 2, 2024. REUTERS/Amr Abdallah Dalsh

Egypt's central bank left its overnight interest rates unchanged on Thursday, as expected, saying economic growth remained slow but that inflation has been decreasing.
The bank's Monetary Policy Committee (MPC) left the deposit rate at 27.25% and the lending rate at 28.25%.
All but one of 18 analysts in a Reuters poll had expected rates to remain unchanged, with the sole analyst forecasting a cut of 100 basis points (bps).
The decision keeps the overnight deposit rate below that of headline inflation, which was 27.5% in June. Real interest rates have been negative since January 2022. Inflation declined in June for a fourth straight month after soaring to a record 38% in September.
The MPC expects inflation to come down sharply in the first half of 2025.
"The gradual unwinding of food inflation along with the improvement of inflation expectations suggest that inflation is on a sustained downward trajectory," the MPC said.
Gross domestic product inched down to an annualized 2.2% in the first quarter from 2.3% in the final quarter of 2023, the MPC added.
"Leading indicators for Q2 2024 suggest that economic activity remains subdued. Consequently, real GDP growth is expected to slow down in FY 2023/24 compared to the previous fiscal year, before recovering in FY 2024/25," it said.
Egypt reported GDP of 3.8% in 2022/23.
The central bank raised interest rates by 600 bps on March 6 as part of an agreement with the IMF, bringing total increases since the beginning of the year to 800 bps. Egypt also sharply devalued its currency against the dollar under its IMF accord.