“Reconstruction and recovery needs following the conflict that affected Lebanon are estimated at US$11 billion,” the World Bank said in a report assessing damage and losses from Oct 8 to Dec 20, 2024.

The report put the war’s total economic cost at US$14 billion, including US$6.8 billion in damage to physical structures and US$7.2 billion in economic losses from reduced productivity, forgone revenues and operating costs.

The Lebanese housing sector was the hardest hit, with losses estimated at US$4.6 billion, while the tourism sector lost US$3.6 billion.

“The impacts of the conflict have resulted in Lebanon’s real GDP contracting by 7.1% in 2024, a significant setback compared to a no-conflict growth estimated at 0.9%,” the World Bank said.

“By the end of 2024, Lebanon’s cumulative GDP decline since 2019 approached 40%, compounding the effects of the multi-pronged economic downturn and impacting Lebanon’s prospects for economic growth,” it said.

Israel and Hezbollah were involved in over a year of cross-border hostilities, including two months of open war, which ended with a ceasefire on Nov 27.

The fighting destroyed vast swathes of Hezbollah’s strongholds in the country’s south and east, as well as Beirut’s southern suburbs.

Even before the war began, Lebanon was in the throes of an unprecedented economic crisis.

The war dealt devastating blows to Hezbollah, the weakening of which helped pave the way for the appointment of a new president and government after a two-year power vacuum.