Lebanon’s real GDP is projected to decline by 6.6 percent in 2024 due to its conflict with Israel, bringing the cumulative GDP contraction since 2019 to over 38 percent, according to the World Bank’s latest Lebanon Economic Monitor (LEM), released on Tuesday.
The report, titled “Mounting Burdens on a Crisis-Ridden Country,” highlights the devastating effects of mass displacement, destruction, and reduced private consumption, which exacerbate Lebanon’s unresolved macroeconomic challenges. It estimates an economic contraction of 5.7 percent in 2024, equating to a loss of 4.2 billion U.S. dollars in consumption and net exports.
Key sectors, including tourism — a cornerstone of the Lebanese economy, have suffered severely due to the conflict, which escalated in September 2024.
The report warns that rising public spending to sustain services and recovery efforts could further strain Lebanon’s currency reserves and fiscal position. Reduced revenue, particularly from VAT, and urgent financing needs may exacerbate fiscal imbalances.
Jean-Christophe Carret, the World Bank’s Middle East Country Director, emphasized the need for comprehensive reforms, targeted investments, and governance improvements to place the country on a sustainable path to long-term recovery. ■