Israel-Hezbollah Conflict Cost Lebanon $8.5 Billion, World Bank says

Ignited by the Gaza war, the conflict had been rumbling on for nearly a year before Israel went on the offensive in September, pounding Lebanon with airstrikes and sending troops into the south.

Lebanon faces estimated economic losses of $5.1 billion over 12 months, driven primarily by heavy impacts on commerce, tourism, and agriculture.

Direct physical damage in Lebanon amounts to at least $3.4 billion, the Damage and Loss Assessment conducted by the World Bank said.

The analysis projects Lebanon’s real GDP will contract by at least 5.7% in 2024 due to the conflict, compared to a 0.9% growth in a scenario without the conflict, a heavy toll for a country still reeling from the effects of a financial collapse five years ago.

“This compounds five years of sustained sharp economic contraction in Lebanon that has exceeded 34% of real GDP, losing the equivalent of 15 years economic growth,” the World Bank said.

Housing is the sector with the most reported damage, estimated at $2.8 billion, with over 99,000 housing units partially or fully damaged, according to the World Bank.

Agriculture, which has been particularly affected in the southern regions of Lebanon, lost over $1.1 billion over 12 months, driven by lost harvest caused by destruction of crops and livestock and displacement of farmers, the report said.

Commerce accounted for $178 million in damage, with economic losses estimated at $1.7 billion, the education sector losses are estimated at $215 million, while the environment has incurred $221 million in damage, it added.

The health sector has suffered losses estimated at $338 million, while tourism and hospitality, one of Lebanon’s main economic drivers, have incurred losses of $1.1 billion, according to the World Bank report.

The conflict is having broader social and environmental implications in Lebanon and has exacerbated food insecurity, the report said.

Source: Reuters