LEBANON — Lebanon’s economy recorded modest signs of recovery in 2025 after years of regression, the World Bank said in a statement.

According to the World Bank’s latest Lebanon Economic Monitor (LEM), real GDP grew by 3.5% in 2025, marking the first positive growth since the financial crisis.

The improvement was driven mainly by tourism and private consumption, alongside early signs of macroeconomic stabilization.

The Winter 2025 LEM, titled “A Fragile Recovery,” noted progress on Lebanon’s reform agenda. Parliament approved several economic and judicial laws, and key public sector appointments were completed. These steps helped improve institutional and political stability.

However, the report stressed that major structural reforms remain unresolved. These include the long-awaited Financial Gap Law and sector-specific reforms.

The World Bank stated that such measures are crucial for restoring fiscal and financial stability and enhancing the effectiveness of earlier reforms.

World Bank Middle East Regional Director Jean-Christophe Carret said recent progress shows the importance of ongoing reforms.

He warned that sustaining the recovery will require faster and more ambitious fiscal, macroeconomic, and sectoral reforms to achieve long-term stability and inclusive growth.

On public finances, the Bank expects a cash-based fiscal surplus. It added that revenue collection still needs improvement, particularly through better tax administration and progressive taxation.

Inflation is projected to decline to 15.2% in 2025 and fall to a single-digit rate in 2026 for the first time since 2019.

This decline is linked to exchange-rate stability and widespread dollarization. Inflation pressures remain high in local services, including rents and education.

Looking ahead, the World Bank forecasts 4% growth in 2026, provided reforms continue, reconstruction funding is secured, and political stability holds.