IMF warns of Lebanon economic contraction in 2026

IMF Lebanon economy banking sector reform debt sustainability financial stability law

Following a mission to Beirut from September 15 to 18, the International Monetary Fund (IMF) has issued warnings regarding Lebanon's economic outlook, projecting a significant contraction in economic activity for 2026. This downturn is attributed to regional security tensions, high energy costs, and widespread damage to infrastructure and housing.

The IMF emphasized that the restructuring of the banking sector must prioritize the protection of depositors. Specifically, the Fund called for amendments to the financial stability and deposit recovery law to ensure that shareholders and junior creditors bear losses before depositors. The Fund also urged the implementation of a previously approved increase in Value Added Tax (VAT) to 12% to help fund public sector wage increases and pensions.

Economic indicators remain critical, with inflation staying in double digits and the current account deficit widening. Minister of Economy Amer Al-Bsat noted that the economy has shrunk from an annual value of approximately 55-57 billion dollars to roughly 32 billion dollars following recent conflicts. Additionally, the tourism sector has faced estimated losses of 2 billion dollars, and the state faces monthly costs of 80 to 90 million dollars to support displaced persons.

Entities

Amer Al-Bsat · Banque du Liban · Central Bank of Lebanon · Ernesto Ramirez Rigo · Ernesto Rica · International Monetary Fund · Lebanon · Ministry of Finance of Lebanon · Yassin Jaber

Claims

What the coverage asserts, and how many sources carry each claim.

[● 3 SOURCES] The IMF urged the implementation of the approved increase in Value Added Tax (VAT) to 12%. www.alborsaanews.com · ch23.com · www.sadanews.ps
[● 7 SOURCES] The IMF expects a significant contraction in Lebanon's economic activity in 2026. www.albiladpress.com · ch23.com · www.sadanews.ps · french.almanar.com.lb · almanar.com.lb · +2 more
[● 2 SOURCES] Supporting displaced persons costs the state an estimated 80 to 90 million dollars per month. almanar.com.lb · french.almanar.com.lb
[● 3 SOURCES] The IMF demands that the financial stability law ensures shareholders and junior creditors bear losses before depositors. www.alborsaanews.com · ch23.com · www.sadanews.ps
[● 2 SOURCES] The Lebanese economy has shrunk from an estimated 55-57 billion dollars annually to approximately 32 billion dollars following the conflict. french.almanar.com.lb · almanar.com.lb
[○ 1 SOURCE] The IMF estimates Lebanon's debt-to-GDP ratio at approximately 139.4% through the end of 2025. alkuwaitnews.net
[● 2 SOURCES] The tourism sector suffered losses estimated at 2 billion dollars, representing 7% of GDP. french.almanar.com.lb · almanar.com.lb
[● 6 SOURCES] Inflation rates in Lebanon remain in the double digits. www.albiladpress.com · ch23.com · www.sadanews.ps · french.almanar.com.lb · almanar.com.lb · +1 more