Lebanon Economic Monitor : Summer 2026 - A Conflict-Torn Economy

Overview & Synopsis

Lebanon entered 2026 on a footing of stabilization, but renewed escalation of conflict in March sharply reversed this path and put the economy under severe strain. The conflict has inflicted a heavy humanitarian toll, triggered mass internal displacement, and caused extensive destruction of housing and infrastructure, particularly in the South and the southern suburbs of Beirut. These new losses compound the damage from the 2024 conflict, before recovery from that episode could take hold. While the authorities have made some progress on reforms, including advancing the legislative framework for banking sector restructuring, the escalation in hostilities has challenged implementation of reforms, redirected attention toward crisis response, and heightened uncertainty around the economic outlook.