Economic Devastation: Impact of Israel-Hezbollah Conflict on Lebanon

The ongoing conflict between Israel and Hezbollah has severely impacted Lebanon's economy, causing an estimated $8.5 billion in damage. The World Bank reports significant losses in commerce, tourism, and agriculture, predicting a GDP contraction of at least 5.7% in 2024. Housing, agriculture, and tourism are hardest hit sectors.

The World Bank reported on Thursday that the prolonged conflict between Israel and Hezbollah has inflicted an estimated $8.5 billion in damages and losses on Lebanon. Officials indicate that the final cost could be significantly higher as the fighting persists.

Initially sparked by the Gaza war, the conflict had been building for nearly a year before Israel launched a military offensive in September. This led to extensive airstrikes and a ground incursion into southern Lebanon. The country is predicted to endure economic losses of $5.1 billion over the next 12 months, with commerce, tourism, and agriculture facing severe impacts.

According to the World Bank's Damage and Loss Assessment, direct physical damage in Lebanon accounts for at least $3.4 billion. The assessment anticipates that Lebanon's real GDP will shrink by at least 5.7% in 2024, a significant blow for an economy already weakened by a financial collapse five years ago. Housing emerged as the most affected sector, with damages reaching $2.8 billion and over 99,000 housing units damaged. The conflict has also exacerbated food insecurity and impacted Lebanon's social and environmental landscape, the report added.

(With inputs from agencies.)