Lebanon’s Economy and Trade Minister, Amin Salam, delivered a sobering assessment during an announcement in Abu Dhabi. “It will take years and it will take a lot of money to recover,” he said.
The once hopeful outlook for Lebanon’s economy, with anticipated annual growth of 2-4%, now faces stagnation due to the repercussions of cross-border strikes.
Minister Salam expressed uncertainty about the upcoming summer season, stating, “We don’t know really if, in the next few months, we can look at a summer season that will pump back billions of dollars into the economy.”
He questioned whether the Lebanese diaspora and other tourists, who inject an estimated $5-7 billion into the economy each summer, would visit the country amidst ongoing uncertainties and travel advisories.
The ripple effects of these advisories are palpable, with local businesses bracing for a potentially fruitless season amidst the conflict’s unfortunate timing coinciding with Lebanon’s vital tourism period.
Beyond the impact on tourism, the conflict has dealt a severe blow to Lebanon’s agricultural sector, a fundamental pillar of its economy, resulting in approximately $2.5 billion in losses.
These stark figures reflect not only a financial setback but also devastating consequences for farmers and communities reliant on agriculture.
The Lebanese government’s appeal for international assistance to rehabilitate damaged farmland underscores the gravity of the situation.
This economic downturn follows years of financial mismanagement and corruption, which began unraveling Lebanon’s economy significantly in 2019, exacerbated by the default on its debt in March 2020 and the steep devaluation of the lira.
Lebanon faces monumental challenges, compounded by the ongoing conflict with Israel and Hezbollah, which has destabilized the region and strained Lebanon’s economy.
With over half of the population already living in poverty or destitution and an unemployment rate reaching 12.6% in 2022, the road to recovery appears increasingly daunting. The looming threat of full-scale war adds to the peril, risking a humanitarian catastrophe.
Despite a strong summer season last year, the recent winter season saw fewer overseas visitors than expected as many canceled their trips due to the Israel-Hezbolah conflict, further adding to the economic challenges faced by Lebanon.
