Lebanon's reconstruction and recovery after the Israel-Hezbollah war will cost an estimated $11 billion, a report from the World Bank said on Friday.
The World Bank concluded that $3 billion to $5 billion of the $11 billion estimate will need to be publicly financed, including $1 billion alone for the country's infrastructure. Private financing is required for about $6 to $8 billion of the costs, mostly in the housing, commerce, industry and tourism sectors, the report added.
Israel and Hezbollah agreed to a ceasefire in November, ending a conflict that killed more than 4,000 people and injured over 16,600, according to figures from the United Nations Office for the Co-ordination of Humanitarian Affairs. At least 1.3 million people were affected at the height of the conflict, with nearly 900,000 internally displaced.
In addition to the human toll, the conflict had exacerbated Lebanon's financial crisis. The World Bank estimated the total cost of the conflict is $14 billion, with physical structures accounting for $6.8 billion in economic losses.
Lebanon's real gross domestic product (GDP) contracted by 7.1 per cent last year because of the conflict, “a significant setback compared to a no-conflict growth estimated at 0.9 per cent”, the World Bank said. The country's GDP has declined nearly 40 per cent since 2019, with the war further compounding Lebanon's economic crisis.
The International Monetary Fund on Thursday confirmed it will be sending a team to discuss reconstruction and recovery needs with Lebanese authorities next week.
Lebanon's housing sector faced the biggest economic losses at an estimated $4.6 billion, while the commerce, industry and tourism sector suffered an estimated $3.4 billion in losses. The World Bank said the Nabatiyeh and South governorates were most impacted by the economic consequences of the war, followed by Mount Lebanon.
