IMF says Lebanon’s economic plan welcome step but more is needed

Beirut: Lebanon’s plan to avert a financial crisis is a step in the right direction but more measures are needed to restore growth and confidence, a senior IMF official said, as mass anti-government protests roil the Arab country.

Prime Minister Sa’ad Hariri presented proposals to almost wipe out Lebanon’s budget deficit next year and reduce wasteful spending. The plan was largely criticised by economists as unrealistic, with Moody’s Investors Service warning that the reliance on central bank financing could undermine Lebanon’s currency peg.

But Jihad Azour, the Middle East and Central Asia director at the International Monetary Fund, said the proposals were an improvement on the government’s 2020 budget proposals, with more measures to repair strained public finances.

“It’s a step that is welcomed,” Azour, a former Lebanese finance minister, said in an interview in Dubai on Sunday. “But Lebanon needs more” to bolster slowing economic growth, create jobs and lower one of the world’s highest debt burdens, he said.

Asked what Hariri’s plan specifically lacked, he said the IMF was studying the proposals to come up with a detailed assessment.