The reconstruction of Lebanon following over a year of conflict between Hezbollah and Israel will require at least $8.5 billion, according to a World Bank report. The report highlights significant economic losses and widespread damage across key sectors, with final costs anticipated to be much higher.
Economic and Structural Damage
The conflict, which spanned from October 8, 2023, to October 27, 2024, has resulted in $5.1 billion in economic losses and caused $3.4 billion worth of damage to physical infrastructure. The hardest-hit sectors include commerce, tourism, hospitality, and agriculture.
The World Bank estimates that nearly 100,000 homes were damaged during the conflict, particularly in southern regions near the Israeli border. The total cost of housing damage is estimated at $2.8 billion, with 81% of the affected properties located in the districts of Tyre, Nabatieh, Saida, Bint Jbeil, and Marjayoun.
Impact on Economic Growth
The conflict has had a severe impact on Lebanon’s economy, cutting real GDP growth for 2024 by at least 6.6%. A separate analysis by the United Nations Development Program (UNDP) projected a 9% decline in Lebanon’s GDP for the year.
The UNDP also warned that the economic fallout will extend well beyond 2024. Lebanon’s GDP is forecast to contract by 2.28% in 2025 and 2.43% in 2026, with the scale of hostilities and economic repercussions surpassing those of the 2006 conflict.
Long-Term Consequences
The World Bank emphasized that the final costs of damage and economic losses are likely to exceed initial estimates. The conflict’s extensive toll on Lebanon’s housing and key industries underscores the need for a large-scale reconstruction effort, with long-lasting impacts on the nation’s economy and infrastructure.
