Debris and rubble from destroyed building lie at the scene of an Israeli strike in the southern Lebanese village of Burj el-Shmali .AFP
Lebanon's economy will contract by one percent in 2024, the EBRD predicted, heavily revising down its estimation made in May that the struggling economy would grow slightly.
Israel's war on Gaza has already impacted neighbouring countries economic growth and fighting is now heighteneing in Lebanon.
"Any escalation will certainly weigh down on growth," Beata Javorcik, the EBRD's chief economist told AFP.
The country, already facing difficult economic conditions and sky-high inflation, has lost more than 40 percent of its GDP since 2018, the bank said in a report.
It added that "political impasse and stagnant progress on critical reforms continued to hold back recovery."
The economies of the countries in which the EBRD operates are expected to grow by 2.8 percent this year, slightly less than the bank previously estimated.
It attributes this to "a weaker outlook for advanced Europe, stagnating mining output in Kazakhstan and Uzbekistan, the ongoing conflict in Gaza and Lebanon and severe droughts in Morocco and Tunisia."
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