Lebanon is accelerating efforts to secure a financial agreement with the International Monetary Fund (IMF), hoping to unlock $3 billion in concessional loans while facing reconstruction needs exceeding $10 billion following its economic collapse and recent Israeli military operations.

Key Developments:

• IMF Negotiations Progress:

  • Technical talks show "positive momentum" (Finance Minister Youssef Khalil)

  • Key reforms achieved: Banking secrecy law passed, banking regulation law drafted

  • Outstanding requirement: Financial gap law to address $70B+ in banking sector losses

• Financing Challenges:

  • IMF funding would cover only 30% of estimated needs ($3B vs $8-11B required)

  • World Bank recently approved $250M emergency infrastructure funding

• Political Hurdles:

  • Pending parliamentary approval of critical laws before 2025 elections

  • Delay in appointing Central Bank deputy governors slowing reforms

Stakeholder Perspectives:

1. Government View:

   • Reform laws demonstrate commitment to change

   • IMF deal seen as gateway to international donor support

2. Economic Analysts:

   • "No IMF agreement possible without financial gap law" (Antoine Farah, Al-Joumhouria)

   • Deal would signal credibility to international investors

3. Regional Dimension:

   • Gulf cooperation deemed essential for recovery (Former Economy Minister Alain Hakim)

Contextual Background:

• Currency devaluation: 98% since 2019

• GDP contraction: ~60%

• World Bank ranks crisis among worst globally since 1850s