IMF: Lebanon is in 'Very Dangerous Situation'

Ernesto Rigo, the head of an International Monetary Fund mission to Lebanon, speaks during a press conference in Beirut, Lebanon, Thursday, March 23, 2023. AP
Ernesto Rigo, the head of an International Monetary Fund mission to Lebanon, speaks during a press conference in Beirut, Lebanon, Thursday, March 23, 2023. AP
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IMF: Lebanon is in 'Very Dangerous Situation'

Ernesto Rigo, the head of an International Monetary Fund mission to Lebanon, speaks during a press conference in Beirut, Lebanon, Thursday, March 23, 2023. AP
Ernesto Rigo, the head of an International Monetary Fund mission to Lebanon, speaks during a press conference in Beirut, Lebanon, Thursday, March 23, 2023. AP

The International Monetary Fund warned on Thursday that Lebanon was in a very dangerous situation a year after it committed to reforms it has failed to implement and said the government must stop borrowing from the central bank.

IMF mission chief Ernesto Rigo told a news conference in Beirut that the authorities should accelerate the implementation of conditions set for a $3 billion bailout.

"One would have expected more in terms of implementation and approval of legislation" related to reforms, he said, noting "very slow" progress. "Lebanon is in a very dangerous situation," he added, in unusually frank remarks.

Lebanon signed a staff-level agreement with the IMF nearly one year ago but has not met the conditions to secure a full program, which is seen as crucial for its recovery from one of the world's worst financial crises.

Without implementing rapid reforms, Lebanon "will be mired in a never-ending crisis," the IMF warned in a written statement after Rigo's remarks.

The economy has been crippled by the collapse of the Lebanese currency, which has lost some 98% of its value against the US dollar since 2019, triggering triple-digit inflation, spreading poverty and a wave of emigration.

The crisis erupted after decades of profligate spending and corruption among the ruling elites, some of whom led banks that lent heavily to the state.

The government estimates losses in the financial system total more than $70 billion, the majority of which were accrued at the central bank.

"No more borrowing from the central bank," Reuters quoted Rigo as saying. "Over the years, the government has been borrowing from the central bank. Not just in the past (but also) the last few months, which is something we have recommended should stop."

The IMF has called for financial sector losses to be distributed in a way that preserves the rights of small depositors and limits recourse to state assets, though powerful politicians and banks have pushed back, delaying the recovery.

"Suffice it to say that the loss is so large that there will unfortunately have to be a distribution between the government, the banks and depositors," Rigo added.

Still, he said that the IMF would "never walk away" from helping a member country and there was no deadline for Lebanon to implement the reforms.



GASTAT: Saudi Industrial Production Index Increases by 3.4% in November 2024

GASTAT publishes the IPI monthly. SPA
GASTAT publishes the IPI monthly. SPA
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GASTAT: Saudi Industrial Production Index Increases by 3.4% in November 2024

GASTAT publishes the IPI monthly. SPA
GASTAT publishes the IPI monthly. SPA

Saudi Arabia’s General Authority for Statistics (GASTAT) said Thursday that the Industrial Production Index (IPI) statistics for November 2024 showed a 3.4% increase compared to the same month of the previous year.

This increase is driven by growth in mining and quarrying, manufacturing, water supply, sewerage, and waste management and remediation activities, GASTAT said.

Furthermore, the sub-index of mining and quarrying activity increased by 1.2%, and the sub-index of manufacturing activity increased by 7.2%.

The sub-index of electricity, gas, steam, and air conditioning supply activity recorded a decrease of 2.1%, and the sub-index of water supply, sewerage and waste management and remediation activities increased by 10.5%.

The IPI by main economic activities increased by 3.8% compared to the same month of the previous year, while the index of non-oil activities also increased by 2.4%.

GASTAT publishes the IPI monthly. It is an economic indicator that reflects the relative changes in the volume of industrial output. It is calculated based on the industrial production survey.