War impact on Lebanon's economy: 10 economic reasons why Lebanon cannot afford the consequences of a new war

Multiple economic and financial sources emphasized that Lebanon's economy cannot withstand the consequences of any new war with Israel, especially if it erupted in the South and spread throughout the country.

Lebanon's economy has lost its immunity, and its resilience is exceedingly limited.

This article is originally published in, translated from Lebanese newspaper Nidaa al-Watan.

These sources have presented several critical points:

1-    The fragile financial stability will be disrupted, and the value of the Lebanese lira will once again face depreciation. The cost of war is exorbitant and requires currently unavailable resources, potentially forcing the state to tap into what remains of the deposits at the Central Bank of Lebanon (approximately $7 billion). These are meager funds left for depositors, making it paltry restitution before others.

2-    Lebanon is already struggling with a shortage of financing. It will suffer even more if it engages in a war against Israel and faces Western sanctions. This could impact remittances from expatriates, which currently serve as a lifeline for hundreds of thousands of families.

3-    Israel would target Lebanon's infrastructure, as it did in the 2006 war, possibly with even greater severity this time. Lebanon's infrastructure is already dilapidated and vulnerable due to the crisis and the lack of funding for maintenance. Due to geopolitical punitive measures, Lebanon may not have the financial support needed for reconstruction.

4-    The potential for additional monetary collapse could lead to higher inflation, increased poverty, further impoverishment of segments of society, and the loss of purchasing capacities.

5-    If events escalate and become more complicated, the airport could be subject to airstrikes, dealing a painful blow to the tourism sector and its associated businesses. Tourism, in addition to remittances, forms a seasonal lifeline during the summer months and holidays.

6-    If Lebanon already suffers losses exceeding $70 billion due to the financial crisis, this amount will inevitably increase to a level it cannot endure in the coming years.

7-    If events further develop, the South and other regions would experience thousands of displacements in a way that the collapsed state could not manage, foreshadowing massive chaos with severe social repercussions.

8-    If the war escalates and extends to the sea, land, and air, drilling operations in Block 9 will undoubtedly halt, and foreign companies will abandon this investment indefinitely due to the arising risks.

9-    If Israel targets facilities and ports, the supply of consumer goods and citizens' necessities could be disrupted, potentially leading to food shortages, medicine, and more. Lebanon imports 80 percent of its consumption needs.

10- Due to possible destruction and additional economic collapse, state revenues will dwindle to low levels, and along with them, all administrative, social, and security services will deteriorate—a comprehensive collapse of the entire state.