Lebanon’s finance ministry said it resumed “interactions” with the International Monetary Fund to get the small nation out of its worst economic crisis in modern history
BEIRUT – The Lebanese Ministry of Finance announced on Monday that it had resumed “interactions” with the International Monetary Fund with the aim of pulling the small country out of the worst economic crisis in its modern history.
The ministry said the government would work for a fair solution for creditors, but did not give details of the talks. The announcement came a week after the new Cabinet appointed a delegation to resume bailout talks with the international agency after talks suspended last year.
Deep disagreements built up within the Lebanese delegation during last year’s negotiations with the IMF, with the government on one side and the central bank and local lenders on the other.
The ministry said the Lebanese government “remains fully committed to engaging in a constructive, transparent and fair debt restructuring process” with all other stakeholders and invites bondholders to participate in the process.
In early March 2020, Lebanon defaulted on $ 1.2 billion in loans, marking its very first default. Since the start of the crisis in October 2019, the local currency has lost more than 90% of its value.
Days after the default in March last year, the government said Lebanon would stop paying all maturing Eurobonds in foreign currencies estimated to be worth around $ 30 billion. Lebanon’s total debt is around $ 90 billion, including about $ 60 billion in Lebanese pound, making it one of the highest in the world.
The finance ministry said the Lebanese government headed by Prime Minister Najib Mikati reiterates its commitment to a “just and comprehensive solution” for all creditors.
The World Bank said in June that Lebanon’s severe economic and financial crisis would likely be one of the worst the world has seen in more than 150 years.
The World Bank said Lebanon’s gross domestic product is expected to contract 9.5 percent in 2021, after declining 20.3 percent in 2020 and 6.7 percent the year before.