World Bank estimates $11 billion needed for reconstruction of Lebanon after Israel-Hezbollah war

BEIRUT (AP) - The cost of reconstruction and recovery for Lebanon following the 14-month Israel-Hezbollah war is estimated at $11 billion, the World Bank said in a new report Friday.

The war killed over 4,000 people in Lebanon, displaced hundreds of thousands and caused widespread destruction in the nation.

The report by the World Bank's Lebanon Rapid Damage and Needs Assessment covered damage and losses in ten sectors across the country from Oct. 8, 2023 until Dec. 20, 2024.

Hezbollah began firing rockets across the border on Oct. 8, 2023, one day after a deadly Hamas-led incursion into southern Israel that sparked the war in Gaza. Israel responded with shelling and airstrikes in Lebanon, and the two sides became locked in an escalating conflict that became a full-blown war in late September. A U.S.-brokered ceasefire went into effect in late November.

The World Bank report estimated that of the $11 billion in reconstruction and recovery needs, $3 to $5 billion will need to be publicly financed, including for infrastructure sectors. It added that private financing is required for about $6 to $8 billion of the costs, mostly in the housing, commerce, industry, and tourism sectors.

The report said the economic cost of the conflict on Lebanon totals $14 billion, with damage to physical structures amounting to $6.8 billion and economic losses from reduced productivity, foregone revenues, and operating costs reaching $7.2 billion.

Housing has been the hardest-hit sector with damages estimated at $4.6 billion.

The report found that the conflict resulted in Lebanon's real gross domestic product contracting by 7.1% in 2024, a significant setback compared to a projected growth of 0.9 percent had the war not happend.

By the end of 2024, Lebanon's cumulative GDP decline since 2019 had approached 40 percent.