BEIRUT, Jan. 22 (Xinhua) -- The World Bank estimated on Thursday that Lebanon's economy grew 3.5 pecent in 2025, signaling a modest recovery after years of sharp contraction.

In its latest Lebanon Economic Monitor, the World Bank revised an earlier forecast of 4.7 percent growth, citing gains in private consumption fueled by remittances, a rebound in tourism, and exchange rate stability since August 2023. By comparison, the International Monetary Fund reported that Lebanon's economy shrank 7.5 percent in 2024.

The World Bank said inflation is expected to ease to 15.2 percent in 2025, with single-digit levels possible in 2026, the first since 2019.

While recent economic and judicial reforms have bolstered political and institutional stability, the bank warned that the recovery remains fragile. Key structural reforms -- including legislation to address financial sector losses and overhauls in critical sectors -- are still pending.

"Sustaining this fragile recovery will require swifter and more ambitious macro-financial and sectoral reforms to achieve lasting stability and inclusive growth," said Jean-Christophe Carret, director of the World Bank's Middle East division.

The report projects 4 percent growth in 2026, contingent on continued reforms, modest reconstruction inflows, and ongoing political stability. ■