Lebanon’s economy is projected to contract 6.4% in 2026 after conflict disrupted a brief recovery that saw real GDP (total economic output adjusted for inflation) expand 4.2% in 2025, the strongest growth since the 2019 financial collapse. The World Bank’s Summer 2026 Lebanon Economic Monitor, titled A Conflict-Torn Economy, said the March 2026 escalation damaged housing and infrastructure, displaced communities, disrupted supply chains and weakened tourism and domestic demand. Inflation is expected to rise to 17.5% because of supply disruptions, higher shipping costs and volatile fuel prices. World Bank division director Dahlia Khalifa said banking-sector restructuring and fiscal management reforms are critical to restoring confidence and mobilizing reconstruction finance. Parliament has passed amendments to the bank resolution law to restructure failing financial institutions and establish a framework for the wider financial-sector crisis. The IMF endorsed the amendments and plans to resume technical meetings in Beirut next month as it evaluates further measures linked to a potential formal bailout program. Former Economy and Trade Minister Alain Hakim said Lebanon’s short-term stability will depend on politics and security as well as economic policy, but argued that economic activity could return after the war, particularly through private-sector and individual initiatives.