# IMF Staff Concludes Visit to Lebanon Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2017-09-15 Category: NEWS Category URL: https://financedigest.com/category/news Meta Title: End-of-Mission IMF Statement on Lebanon's Economy Meta Description: Review of Lebanon's economic situation, challenges, and recommendations for sustainable growth and fiscal adjustment after IMF staff visit. Learn more. URL: https://financedigest.com/imf-staff-concludes-visit-to-lebanonhtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/fd140917-3-1-1736843496421-compressed.jpg) End-of-Mission press releases include statements of IMF staff teams that convey preliminary findings after a visit to a country. The views expressed in this statement are those of the IMF staff and do not necessarily represent the views of the IMF’s Executive Board. This mission will not result in a Board discussion. - Front-loaded fiscal adjustment is needed based on revenue measures, increasing tax compliance, increasing fuel taxation, and rebalanced spending, including by reducing [costly electricity](https://www.financedigest.com/when-is-the-cost-of-electricity-the-cheapest-in-a-day.html "When Is The Cost Of Electricity The Cheapest In A Day?") transfers. - The authorities can promote [sustainable growth](https://www.financedigest.com/single-dose-packaging-market-expected-to-witness-a-sustainable-growth-over-2024.html "Single Dose Packaging Market Expected To Witness a Sustainable Growth Over 2024") through structural reforms, including by taking steps to improve the business climate. - Lebanon, which has provided a safe haven for over a million Syrian refugees, has received international assistance for its efforts and deserves continued support. An International Monetary Fund (IMF) team led by Mr. Chris Jarvis visited Beirut from September 7 to 13, 2017 to take stock of Lebanon’s [economic and financial developments, assess the economic outlook](https://www.financedigest.com/credit-squeeze-biggest-threat-to-economic-outlook-fidelity-international-says.html "Credit squeeze ‘biggest threat’ to economic outlook, Fidelity International says"), and discuss policy priorities. At the conclusion of the visit, Mr. Jarvis made the following statement: “My team and I had the privilege of meeting with President Michel Aoun, Prime Minister Saad Hariri, [Central Bank](https://www.financedigest.com/central-banks-ease-off-on-rate-hike-push-in-october.html "Central banks ease off on rate hike push in October") Governor RiadSalamé, Director General of Finance Alain Bifani, Minister of State for Displaced Affairs Mouein Merehbi, and Minister of State for Combating Corruption Nicolas Tueni. We also [benefited from meetings](https://www.financedigest.com/france-to-host-pro-nuclear-meet-to-push-for-eu-recognition-of-climate-benefits.html "France to host pro-nuclear meet to push for EU recognition of climate benefits") with parliamentarians, officials of the Ministry of Finance and the BdL, representatives of the private sector, and the international community. “Lebanon’s economic conditions [remain challenging and regional spillovers continue to dominate the near-term outlook](https://www.financedigest.com/automotive-glass-market-to-witness-sales-slump-in-near-term-due-to-covid-19-long-term-outlook-remains-positive.html "Automotive Glass Market to Witness Sales Slump in Near Term Due to COVID-19; Long-term Outlook Remains Positive"). Lebanon has provided a safe haven for over a [million Syrian refugees—estimated to be about a quarter](https://www.financedigest.com/warner-bros-discovery-adds-2-million-subscribers-in-first-quarter.html "Warner Bros Discovery adds 2 million subscribers in first quarter") of the population. Lebanon has received international assistance for its efforts and deserves continued support. “Lebanon has [made political progress](https://www.financedigest.com/sweden-finland-and-turkey-have-made-progress-on-nato-membership-sweden-says.html "Sweden, Finland and Turkey have made progress on NATO membership, Sweden says") in recent months, with a new electoral law ratified in parliament, paving the way for the first parliamentary elections in eight years. Despite these developments, we [expect real growth](https://www.financedigest.com/meat-alternatives-market-expectations-growth-trends-highlighted-until-2031.html "Meat Alternatives Market Expectations & Growth Trends Highlighted Until 2031") to remain subdued in 2017, while the external imbalance remains very large. The wide budget deficit also remains a source of vulnerability, and led to public [debt reaching](https://www.financedigest.com/stocks-reach-one-month-high-on-u-s-debt-ceiling-hopes.html "Stocks reach one-month high on U.S. debt ceiling hopes") 148 percent of GDP in 2016. The recently passed public sector salary scale increase will significantly increase fiscal expenditure. While parliament has passed revenue measures designed to offset the [fiscal impact](https://www.financedigest.com/impact-com-fiscal-year-h1-2021-1-5b-valuation-150m-in-funding-bigcommerce-integration-69-customer-growth.html "impact.com Fiscal Year H1 2021: .5B Valuation, 0M in Funding, BigCommerce Integration, 69% Customer Growth") of the salary scale increase, they are currently suspended. “Lebanon’s [economy is known for its resilience](https://www.financedigest.com/stocks-dollar-gain-on-resilient-u-s-economy.html "Stocks, dollar gain on resilient U.S. economy"), and it has repeatedly managed to weather significant shocks. To preserve confidence there is an [urgent need](https://www.financedigest.com/ftx-collapse-shows-urgent-need-to-finalise-eu-crypto-rules-says-european-commission.html "FTX collapse shows urgent need to finalise EU crypto rules, says European Commission") to place the economy on a sustainable path and halt the rise in public debt. Front-loaded fiscal adjustment is needed based on revenue measures, increasing tax compliance, increasing fuel taxation, and rebalanced spending, including by reducing costly electricity transfers. “The authorities can also promote [sustainable growth](https://www.financedigest.com/medical-device-cleaning-market-expected-to-witness-a-sustainable-growth-over-2019-2027.html "Medical Device Cleaning Market expected to Witness a Sustainable Growth over 2019 – 2027") through structural reforms, including by taking steps to improve the business climate. There is a need to improve the institutional framework before undertaking large investment projects, and to assess the risks and potential fiscal costs arising from any Public-Private Partnership projects. Passing a budget—the first in more than a decade—with reliable fiscal adjustment measures would send a strong signal of commitment to reduce public debt and will [boost confidence](https://www.financedigest.com/asian-shares-rise-after-consumer-confidence-boosts-nasdaq-to-record-high.html "Asian shares rise after consumer confidence boosts Nasdaq to record high"). “Lastly, the [exchange rate](https://www.financedigest.com/currency-exchange-how-to-find-the-best-rates.html "Currency Exchange: How to Find the Best Rates") peg remains an appropriate nominal anchor. The BdL needs to stand ready to increase interest [rates if deposit inflows were to decelerate after the end](https://www.financedigest.com/ecb-goes-big-with-50-basis-point-hike-ending-negative-rates-era.html "ECB goes big with 50 basis-point hike, ending negative rates era") of the recent round of financial engineering operations. It is also important that BdL continues to monitor and mitigate [risks in the banking](https://www.financedigest.com/ukraines-giant-seed-bank-at-risk-of-being-lost-as-war-rages.html "Ukraine’s giant seed bank at risk of being lost as war rages") sector. “Finally, I would like to express my gratitude to the Lebanese authorities for their gracious hospitality and their openness. We appreciate the high quality of our discussions and look forward to continued dialogue with the authorities.” --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---