Lebanon economy to contract by 6.4 percent due to war, World Bank says

Lebanon economy to contract by 6.4 percent due to war, World Bank says The World Bank projects that Lebanon's economy would contract by 6.4 percent this year, as the ongoing war derailed the country's efforts at recovery. Due to the war, "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," the World Bank said in a report. Inflation is also expected to rise to 17.5 percent this year, "driven by supply disruptions, higher shipping costs, and rising oil prices, further reducing people's purchasing power," the report said. The World Bank said Lebanon's economy had strengthened before the latest conflict, with an estimated real GDP growth of 4.2 percent in 2025, "the fastest since the onset of the 2019 financial crisis". "Advancing reforms -- particularly on banking sector restructuring and fiscal management -- will be critical to restoring confidence, protecting stability, and mobilising the financing needed for reconstruction and recovery," Dahlia Khalifa, the World Bank's Middle East director, said. (Reporting by AFP)