WB: From a 4% Projected Growth to a 6.4% Contraction in 2026

Lebanon entered 2026 with signs of stabilization, but the March escalation of conflict quickly derailed this progress. The conflict has caused severe humanitarian losses, driven mass displacement, and left housing and infrastructure in ruins in the South and southern Beirut suburbs. These new losses add to the damage from the 2024 war. Reform efforts, including steps toward banking sector restructuring, have been disrupted as authorities shift focus to crisis response. According to the World Bank (WB) Lebanon Economic Monitor (LEM) for Summer 2026, titled A Conflict-Torn Economy, Lebanon’s brief stabilization in 2025 led to an upward revision of growth to 4.2%, compared with 3.5% in the Winter 2026 LEM. However, the renewed conflict in 2026 reversed this trend, prompting a sharp downward revision: instead of the 4% growth projected in the Winter 2026 LEM, the economy is now expected to contract by 6.4% this year. This paper will examine the WB’s findings in greater detail.

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