IMF Bolsters Support for Iraq and Lebanon Amid Growing Regional Assistance Efforts

The International Monetary Fund (IMF) is set to expedite discussions with Iraq and Lebanon as part of a wider initiative to support vulnerable nations in the Middle East and North Africa (Mena), according to the fund's managing director. Kristalina Georgieva stated that Baghdad has approached the Washington-based IMF for a potential program, indicating the fund's readiness to assist any country seeking its aid and its ongoing exploration of opportunities within the region. "We will support Iraq very firmly. We would get Iraq both money and policy support," Georgieva announced at the IMF and World Bank annual meetings in Thailand on Saturday. She also highlighted IMF's existing support for Egypt and Jordan.

Intense discussions are also underway with Lebanese authorities, Georgieva noted. "We have made significant progress towards a programme. [There is] still a bit more work to do together and I'm confident we will be successful," she said. Iraq has been confronting a severe economic and security crisis since the outbreak of the Iran war in February, but Baghdad is actively working to improve its international standing. Last month, Prime Minister Ali Al Zaidi urged global investment in Iraq during his presentation of economic and anti-corruption plans at the UN General Assembly in New York.

Lebanon, heavily dependent on imports, is particularly susceptible to supply chain and energy disruptions stemming from the regional conflict. The country is also still grappling with the severe economic crisis that began in 2019, which the World Bank has described as one of the worst in modern history, projecting a 6.4 percent contraction in Lebanon's economy for 2026. The IMF recently indicated it would review any proposed changes to Lebanon's bank resolution law to ensure alignment with international standards. On Wednesday, Lebanon's central bank governor, Karim Souaid, expressed optimism to Bloomberg about a potential "breakthrough" by the end of 2026 in IMF negotiations concerning the law, which outlines the repayment of depositors affected by the nation's financial collapse.

"Programmes for Iraq and Lebanon would go a long way," Ms. Georgieva remarked. She also commended the reform efforts undertaken by Gulf governments, which have enabled them to mitigate the impact of recent economic shocks. "It would've been much worse if ... many of them have not done reforms and been building buffers," she added.