"The IMF underscored the need to reform the electricity sector by raising average tariffs toward costs recovery, while mitigating the impact on the poor and rebalancing freed-up resources toward capital and social spending," the IMF said in its Executive Summary on
State-owned Electricite du Liban has urged the government to revise the current electricity rates to reduce the deficit and allow the company to supply more electricity to most Lebanese regions.
In this context, the IMF urged caution in implementing the planned salary scale adjustment for public sector employees.
"[IMF] Directors encouraged the authorities to undertake revenue-enhancing measures, such as broadening the tax base and strengthening collection, while ensuring that they are equitable and minimize distortions," the statement said.
The IMF repeated calls to fully abide by a strict fiscal and monetary police in
"Directors considered that stronger fiscal management, including adhering to a budget calendar and pursuing a medium-term budget framework, would contribute to fiscal sustainability," the IMF statement added.
They agreed that monetary policy should remain geared toward maintaining adequate foreign exchange reserves and supporting the exchange rate peg as a signal of commitment to macrofinancial stability. They encouraged the authorities to scale back the government's reliance on
This is the first time the IMF has explicitly called on the government to reduce its dependence on the financial resources of the
The directors noted that the banking sector has been resilient, but is facing an increasingly challenging environment. They emphasized the need to further strengthen capital buffers and improve loan classification and restructuring rules. They also encouraged further strengthening of the AML/CFT framework.
The IMF emphasized the importance of undertaking structural reforms to unlock
The IMF reiterated its warning about the immediate economic impact of the Syrian refugees on
It cautioned that without a resolution in
"Growth is likely to be subdued at around 2 percent this year, reflecting domestic and regional uncertainties, and return only gradually to potential – a moderate 4 percent. Inflation could pick up with the planned salary increase. Financing needs would remain high, due to large fiscal and current account deficits," the IMF said.
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