Lebanon and IMF begin talks on rescue package

BEIRUT — Lebanese officials began much-delayed talks with the International Monetary Fund (IMF) on Monday on support measures aimed at lifting the country out of its worst-ever economic crisis.

"We hope the negotiations will be concluded as soon as possible, but given the complexity of the issues it is possible that other rounds will be held," Deputy Prime Minister Saade Chami, who heads the Lebanese delegation, said in a statement.

The talks are taking place online due to COVID-19 restrictions.

Lebanon is hoping to obtain a financial rescue package to rekindle an economy that has been in free fall for two years.

The previous government held several rounds of talks with the multilateral lender, but was unable to secure a bailout, amid a failure by the two sides to agree on the scale of financial losses stemming from the meltdown.

The current government opened a preparatory dialogue with the IMF last year and has settled on a figure of around $69 billion as its estimate for the financial sector's losses, ahead of the talks that began on Monday.

The country defaulted on its sovereign debt in 2020, the currency has lost around 90 per cent of its value on the black market and four out of five Lebanese are now considered poor by the United Nations.

Despite the country's shocking social and economic decline, Lebanon's ruling class has continued to stall reforms demanded by foreign donors ahead of any assistance.

The Cabinet of Prime Minister Najib Mikati met on Monday for the first time since mid-October, after months of political horsetrading between its rival factions.

"In this first round of negotiations and over the next two weeks, we will discuss several topics, including the budget, the banking sector and the exchange rate," Chami said in the statement issued by Mikati's office.