World Bank predicts 6.4% Lebanon economy decline in 2026
The World Bank expects Lebanon's economy to shrink by 6.4% in 2026, following a growth of 4.2% in 2025, which was the highest rate since the start of the financial crisis in 2019. The report attributes this decline to the recent escalation in the Israeli conflict on Lebanon, which has led to infrastructure destruction, increased internal displacement, disrupted supply chains, and negatively impacted tourism and domestic demand. Additionally, inflation is forecasted to rise to 17.5% in 2026. The country needs to implement financial reforms, especially in the banking sector and fiscal management, to restore confidence and secure the necessary funding for reconstruction and recovery.
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