BEIRUT: The World Bank on Friday projected that Lebanon’s economy would contract by 6.4 percent this year, as the latest Israel-Hezbollah war derailed the country’s efforts at recovery.
Lebanon has been dealing with an unprecedented financial crisis since 2019 and was still reeling from the 2024 Israel-Hezbollah war when the Iran-backed group drew it into the Middle East conflict by attacking Israel in March.
Israel responded with a heavy air campaign and ground invasion that Lebanese authorities say have killed more than 4,300 people.
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.
