Hezbollah’s war with Israel cost Lebanon at least $8 billion — World Bank
Report says losses concentrated in commerce, tourism, hospitality and agriculture, in addition to damage to physical structures; final costs expected to be far higher
BEIRUT, Lebanon — More than a year of conflict between Hezbollah and Israel have cost Lebanon more than $5 billion in economic losses and damaged nearly 100,000 homes, the World Bank said on Thursday.
Since September 23 of this year, Israel has been conducting a ground operation in southern Lebanon to dismantle Hezbollah’s infrastructure and push the terror group back from the Israeli border, after a year of near-daily cross-border attacks that drove some 60,000 residents of northern Israel from their homes.
Hezbollah-led forces began attacking Israeli communities and military posts along the border on October 8, 2023, with the group saying it was doing so in support of Gaza following the October 7, 2023, Hamas terror onslaught in southern Israel.
The World Bank report provided estimates for damage in Lebanon between October 8, 2023, and October 27, 2024, saying “the conflict has caused $5.1 billion in economic losses,” with damage to physical structures amounting to “at least $3.4 billion” on top of that.
The losses are “largely concentrated in the commerce and tourism and hospitality sectors… as well as in the agriculture sector,” the report said.
“The final cost of damage and losses for Lebanon associated with the conflict is expected to significantly exceed those presented in this assessment,” the report said.
The conflict has also “damaged an estimated 99,209 housing units” — mainly in Lebanon’s south near the border with Israel — totaling $2.8 billion in damages, it said.
In late September, Israel dramatically ramped up its bombing across Lebanon, with strikes now regularly hitting Beirut’s southern suburbs, towns in southern Lebanon and parts of the eastern Bekaa Valley, including the border with Syria.
Eighty-one percent of damaged and destroyed houses are located in the Tyre, Nabatieh, Saida, Bint Jbeil and Marjayoun districts.
The World Bank estimates that the conflict cut Lebanon’s real GDP growth for 2024 by at least 6.6%.
Lebanon had already been reeling since 2019 from an intense economic crisis that pushed most of the population into poverty.
“This compounds five years of sustained sharp economic contraction in Lebanon that has exceeded 34 percent of real GDP, losing the equivalent of 15 years of economic growth,” the World Bank said.
The United Nations Development Program (UNDP) estimated in October that the war would wipe nine percent off Lebanon’s national wealth as measured by GDP, with the scale of hostilities and economic fallout set to surpass the last war in 2006.
The consequences of the war are also expected to persist for several years, the UNDP said, with Lebanon’s GDP likely to contract by 2.28% in 2025 and 2.43% in 2026.
Inside Israel, the economy is also feeling the impact of a year-long war, first with Hamas in Gaza and then with Hezbollah in Lebanon.
The Central Bureau of Statistics said last month that gross domestic product rose by an annualized 0.3 percent in the second quarter, far below economists’ expectations, which had ranged from 2.3% to 5% for the quarter.
Also in October, the Bank of Israel trimmed its economic growth estimate in 2024 to 0.5% from a prior estimate of 1.5%. In total, direct war costs have ballooned to an estimated NIS 250 billion ($66 billion) since October 7 last year.
