World Bank projects war-hit Lebanon’s economy to contract by 6.4 percent

Conflict with Israel derails Lebanon’s economic recovery as inflation and consumer prices rise, the global lender says. Lebanon’s economy is projected to shrink by 6.4 percent this year as conflict turns a brief post-crisis recovery into a sharp downturn, says the World Bank. The global lender’s Summer 2026 Lebanon Economic Monitor, titled A Conflict-Torn Economy, noted that the country entered the year on stronger footing after expanding by 4.2 percent in 2025, its highest real gross domestic product (GDP) growth since the 2019 financial collapse. “The rebound was sharply interrupted by the March 2026 escalation in conflict, which further damaged housing and infrastructure, displaced communities, disrupted supply chains and weighed heavily on tourism and domestic demand,” the report said on Friday. “Real GDP is projected to contract by 6.4 percent in 2026, reflecting the collapse in tourism, weaker consumption, disrupted supply chains, heightened insecurity, and prolonged displacement,” it added.

Missing media or need the complete publisher report? Open Al Jazeera ↗