Economy

World Bank Forecasts Lebanon’s Economy to Contract 6.4% in 2026

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Courtroom-sketch editorial illustration of a tall dark smoke plume rising from an explosion among low buildings in a Lebanese town, viewed across dry hills and fields, drawn in warm ochre and slate-blue chalk and pastel strokes with cross-hatching on sepia newsprint.

The World Bank forecasts Lebanon’s real GDP will contract 6.4% in 2026 after renewed conflict reversed the fragile recovery recorded last year. It estimates the economy grew 4.2% in 2025, the fastest expansion since the 2019 financial crisis, but says the new fighting damaged homes and infrastructure, displaced communities, disrupted supply chains and weakened tourism and domestic demand. The bank projects 17.5% inflation and says 2026 growth is 10.4 percentage points below its no-conflict scenario. Public debt remains unsustainable, and debt-restructuring negotiations have not begun.

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