InfoPro study digests
social and economic losses

Economy collapses again as war shows no end in sight

The economy has transitioned from a cycle of recovery into a state of prolonged crisis according to 'The 2026 War: First Month Report', just released by InfoPro. The study details how a renewed escalation in hostilities has derailed the fragile stabilization of 2025, pushing the nation into a double-dip economic and social collapse.

A Systemic Second Shock
The report identifies the 2026 conflict as a second systemic shock, striking a population already exhausted by the 2024 war and the 2019 financial crisis. Unlike previous episodes, this escalation is unfolding on top of accumulated damage. Within just the first month, an estimated one million people, or nearly a fifth of the population, have been displaced.

Economic losses are staggering, with the country estimated to be losing $60–80 million per day during active hostilities. The Institute of International Finance (IIF), cited in the report, projects a real GDP contraction of 12–16 percent for 2026, depending on the conflict’s duration.

Sectoral Impacts: Hospitality Collapses, Poultry Resilient

The report highlights a deeply uneven impact across the private sector:
• Hospitality & Retail: These sectors have been hit hardest. Hotel occupancy has collapsed by more than 90 percent, with many establishments in the South and Mount Lebanon shutting down entirely. Retail activity in Beirut has plummeted by up to 80 percent.
• Agriculture: War has damaged approximately 22% of total cultivated area. In the South, 77% of farmers have been displaced, leading to the widespread abandonment of olive presses, greenhouses, and processing facilities.
• Industry: Manufacturers are in survival mode, facing a two-to-threefold increase in shipping costs and severe export disruptions to Gulf markets.
• Food Security: In a rare sign of resilience, the poultry sector remains stable. Production is expected to reach 115–120 million birds, significantly exceeding the national consumption need of 100 million.

Precarious Fiscal Outlook
The fiscal situation is deteriorating rapidly. While some discipline was restored in 2024-2025, the current contraction is expected to wipe out revenue from VAT and Customs. The government is likely to rely on drawing down the Central Bank’s foreign currency reserves, currently estimated at $11.7 billion, and from external grants to meet rising social and reconstruction demands.

The Path Forward
InfoPro’s smooth hybrid model suggests that while the opening shock is the most severe, the residual floor of disruption will define the landscape for years. Recovery now hinges on a technical rebound in 2027-2028, but only if stability is sustained and massive international support estimated at $11 billion for reconstruction is secured.