Local economy

IMF forecasts sharp contraction in Lebanese economic activity in 2026

The International Monetary Fund forecasts a major contraction in economic activity in Lebanon in 2026, as the conflict in the Middle East and broader regional security tensions continue to weigh on the economy, infrastructure and living conditions.

Published:

Listen to this article

An automatically generated audio version.

0:00
0:00
IMF forecasts sharp contraction in Lebanese economic activity in 2026

The International Monetary Fund forecast on Friday, September 18, 2026, a major contraction in economic activity in Lebanon in 2026, as the conflict in the Middle East and broader regional security tensions affect the economy, infrastructure and living conditions.

Inflation and the current-account deficit

The Fund said Lebanon’s inflation rates remain in the double digits, while the current-account deficit has widened, largely due to higher energy costs.

Infrastructure and living conditions

The Fund added that damage to infrastructure, internal displacement and deteriorating living standards had intensified the economic pressures facing the country.

Economic reform talks

The Fund said on June 25, 2026, that it was discussing with the Lebanese authorities measures to manage the economic crisis and mitigate the fallout from the conflict, while continuing talks on a comprehensive reform program focused on restructuring the banking sector and developing a medium-term fiscal strategy.

Read this story in another language

Related stories

East German economy at 79% of western Germany’s strength 36 years after reunification

The economic strength of Germany’s five eastern states reached only about 79% of the level of the western states in 2025, compared with slightly more than 78% in 2024, according to calculations by the German Economic Institute (IW). The report showed that progress in narrowing the gap has stalled since 2020, amid weak research and development, stagnant investment and declining labor-market participation.

Pound depreciation pushes Sudan drug prices up by 30% to 35%

Prices for several medicines in Sudan rose by between 30% and 35% in mid-July last year, as the pound’s decline and foreign-exchange volatility drove up import and local production costs. Many companies halted sales while waiting for prices to stabilize or repricing their inventories.