Lebanon GDP could drop by 9.2% due to war, says UN
The war in Lebanon could further destabilise the country’s already faltering economy, the UN warned on October 23rd, according to the Arab News via AFP.
The body predicted a 9.2% drop in GDP in 2024 if the war continued. “The scale of the military engagement, the geopolitical context, the humanitarian impact and the economic fallout in 2024 are expected to be much greater than in 2006,” the last year Israel launched a full-scale invasion, the UN Development Programme said in an initial evaluation of the impact on Lebanon’s economy.
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“The escalating hostilities in Lebanon in 2024 strike while Lebanon is already weakened by years of political, economic, and social crises,” it added. Lebanon’s GDP fell by 28% between 2018 and 2021, and the Lebanese pound lost more than 98% of its value, leading to hyperinflation and a major loss of purchasing power, according to the report.
The situation seemed to have gained some stability in 2022 and 2023, and the UN had predicted a 3.6% growth rate in 2024, a UNDP economist named Kawthar Dara told AFP.
However, the current war, especially since September’s ground invasion “threatens to further destabilize Lebanon’s already fragile economy,” and lead to a “prolonged economic downturn.” “Even if it ends in 2024, the consequences of the escalation of hostilities in Lebanon are expected to persist for years,” the UNDP report said.
Without “substantial” international support, Lebanon has a “grim” economic outlook, with GDP expected to fall by 2.28% in 2025 and another 2.43% the following year.
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In 2006, economic activity resumed along with reconstruction following war, but this time around, “the dynamic is totally different,” Dara said, expressing concern about the potential unwillingness of international donors to come to Lebanon’s aid this time.
The report said that with living conditions so diminished “it is imperative for the international community to mobilize immediate humanitarian relief support,” along with development assistance for long-term recovery.
AFP
