The International Monetary Fund (IMF) released a damning assessment of Lebanon’s economy on Thursday as the country slides further into economic and political crisis.
The Washington-based financial institution said the “continuation of the status quo” in crisis-stricken Lebanon will have significant consequences. The IMF specifically mentioned dollarization, whereby business demand to be paid in dollars instead of the local currency, as well as inflation and decreased government revenue.
“Further delays of reforms will keep confidence low and cash dollarization of the economy will increase. The exchange rate will continue to depreciate, keeping inflation high,” said the IMF in a press release. “Economic activity will move into informal sectors, further complicating the collection of fiscal revenues.”
The IMF added that without reform, Banque du Liban, Lebanon’s central bank, “saddled with unaddressed losses and a lack of credibility, will continue to lose international reserves.”
