$10 billion economic toll: Lebanon faces massive losses one year after escalation

Report by Theresia Rahme, English Adaptation by Karine Keuchkerian

October 7, 2023: A day that Hamas determined the fate of the Palestinian people with the start of Operation Al-Aqsa Flood.

As events escalated, slain Hezbollah leader Sayyed Hassan Nasrallah decided to enter the war from Lebanon to support Gaza, despite the difficult economic conditions that have plagued Lebanon since 2019. 

The resistance made its decision and entered the battlefield.

A part of the south has been destroyed, with approximately 11,000 housing units affected. According to the Council for South Lebanon, today's estimates indicate that these figures could be doubled, with losses estimated at about $500 million.

During the holidays, which are typically a peak season for movement and sales, the flow of visitors to Lebanon has decreased by a significant percentage compared to last year. 

Due to the war, some shops in the south did not open, causing damage to 220 industrial and commercial establishments, with losses estimated at around $15 million.

People's fears of visiting Lebanon have increased between the Christmas and Ramadan holidays, especially with the possibility of the airport closing. Due to continuous shelling, about 220 million cubic meters of land have burned, and 12 million cubic meters were not planted. Total losses in the agricultural sector are estimated at $350 million.

The summer, which was supposed to be promising, unfortunately yielded nothing. People have become afraid to come to Lebanon, especially after the events of July 30, when Hezbollah leader Fouad Shokor was assassinated. 

This led to the month of August, the peak of summer and a crucial tourist season, being completely derailed.

After the assassination of the prominent Hezbollah leader in an airstrike on Beirut's southern suburbs, hotel activity decreased by 60%. 

People began to fear traveling to Lebanon, as 90% of hotels partially closed their rooms.

As a result, tourism in Lebanon decreased by 83% in August compared to the previous year. Restaurant sales dropped by 50% compared to last year. Losses in the tourism sector amounted to about $3 billion.

After September 17, following the pager explosions and Lebanon's gradual entry into the war, the southern region, Beirut suburbs, and the Bekaa region were hit hard. The full extent of direct and indirect economic losses has yet to be calculated.

A year later, estimates show that Lebanon’s economy suffered $4 billion in direct losses and $1 billion in indirect losses before September 17. When accounting for damages through October 7, total losses are projected to reach $10 billion.