World Bank estimates Lebanon needs $11 billion for economic recovery, reconstruction

Lebanon will require an estimated $11 billion for economic recovery and reconstruction following the conflict with Israel, according to a report released Friday by the Lebanon Rapid Damage and Needs Assessment (RDNA) 2025.

The report indicates that between $3 billion and $5 billion of the total recovery cost will need public funding, with $1 billion allocated for infrastructure sectors, including electricity, public and municipal services, transportation, and water, wastewater, and irrigation.

Meanwhile, private sector funding is expected to cover between $6 billion and $8 billion, primarily targeting housing, businesses, manufacturing, and tourism.

The World Bank’s assessment also estimated the total economic cost of the conflict at $14 billion, including $6.8 billion in physical structural damage and $7.2 billion in economic losses stemming from lost revenue, decreased productivity, and operational expenses.

“Housing has been the hardest hit sector with damages estimated at $4.6 billion,” the report stated, adding that the commerce, industrial, and tourism sectors suffered $3.4 billion in damages nationwide.

Lebanon’s gross domestic product (GDP) took a significant hit, recording a 7.1% decline in 2024, reversing the 0.9% growth recorded before the conflict.

“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,” the report noted.

Following months of cross-border fighting between Israel and the Lebanese resistance group Hezbollah, which escalated into full-scale conflict in September, a tenuous truce has been in effect since Nov. 27.

However, Lebanese authorities have documented nearly 1,100 ceasefire violations by Israel, with at least 84 casualties and over 280 injuries reported.