The World Bank forecasts that Lebanon's economy will contract by 6.4% this year as the ongoing war has hindered the country's recovery efforts.
According to the World Bank report, real GDP is expected to decline by 6.4% in 2026. This decline reflects the collapse of tourism, weakening consumer demand, disrupted supply chains, increased instability, and prolonged population displacement.
Furthermore, inflation is projected to rise to 17.5% this year. This increase is driven by supply disruptions, higher transportation costs, and rising oil prices, which further reduce citizens' purchasing power.
The World Bank noted that before the start of the latest conflict, Lebanon's economy was showing strengthening, reaching an estimated real GDP growth of 4.2% in 2025, the fastest rate since the beginning of the 2019 financial crisis.
Dalia Khalifa, World Bank Director for the Middle East, emphasized that advancing reforms—especially regarding banking sector restructuring and fiscal management—will be crucial for restoring confidence, ensuring stability, and attracting the financing needed for recovery and exiting the crisis.