"Lebanon's GDP Set to Decline by 9% Amid Escalating Conflict with Israel"

The United Nations has projected that the ongoing conflict between Israel and the Hezbollah militant group is expected to result in a significant 9% decline in Lebanon's GDP. The UN Development Programme (UNDP) anticipates that the economic impact and scale of the conflict will surpass that experienced during the 2006 war.

In a rapid assessment of the impact on Lebanon's economy, UNDP reveals a sharp anticipated decrease of about 9.2% in the country's GDP, equating to roughly a $2 billion setback. This decline is directly linked to the ongoing conflict.

UNDP also expects an increase of 30% in Lebanon's government financing needs as it deals with the aftermath of a conflict anticipated to last until the end of 2024. When hostilities intensified following Hezbollah's rocket launches into Israel last year, Lebanon was already grappling with severe economic downturns and a political crisis.

The recent escalation has seen Israel extend its bombing campaign to include southern suburbs of Beirut, major towns in southern Lebanon, and areas in the eastern Bekaa Valley near the Syrian Arab Republic border. UNDP warns that the damage to Lebanon's infrastructure, housing, and productive capacities like factories could be similar to the aftermath of the 2006 war, causing damage estimated between $2.5 billion and $3.6 billion. However, broader economic consequences for Lebanon in 2024 are expected to be much more severe.

Trade activities are projected to drop by 21% due to the closure of critical border crossings, with job losses anticipated in the tourism, agriculture, and construction sectors. The report also highlights significant environmental losses over the past year, risks posed by unexploded ordnance, and pollution arising from hazardous materials, including the use of white phosphorus, particularly in southern Lebanon.

Government revenues are expected to decline by 9%, while total investment is projected to fall by more than 6% throughout both 2025 and 2026. As Lebanon faces these challenges, UNDP stresses the need for increased international aid to support sustainable recovery, meet humanitarian needs, and mitigate the long-term social and economic consequences of the conflict.

Lebanon’s crisis management minister stated that the country needs $250 million monthly to support over 1.2 million people displaced by Israeli attacks. A summit hosted by France is planned, aiming to gather international support for Lebanon during these difficult times.