Lebanon’s Economy Minister Amin Salam has issued a stark warning about the catastrophic economic repercussions of the ongoing conflict between Israel and Hezbollah, describing the situation as "terrifying" for a nation already grappling with a deep economic crisis.  

In an interview with EFE, Salam highlighted that unemployment in Lebanon has soared to 50%, while the country’s GDP is projected to decline by 6% to 8% this year, according to World Bank estimates.  

“The loss of GDP will double next year. Even if the war ends in the next few weeks or months, the economy will remain under strain because the government will have to manage 1.5 million displaced people and focus on reconstruction efforts. There will be no momentum to stimulate economic growth,” Salam explained.  

Lebanon’s economy had begun to show signs of improvement in 2023, following nearly four years of economic collapse. Salam credited this progress to job creation and an influx of dollars through tourism, agriculture, and certain services.  

However, the outbreak of the conflict reversed these gains. The situation worsened gradually over the past year, culminating in what Salam described as a "really intense" summer of war.  

As a result, the tourism sector—once a cornerstone of Lebanon’s economy, contributing $6–10 billion annually—has been completely decimated. Similarly, the agricultural sector, which used to generate $2–3 billion annually, has been devastated by bombings and the destruction of farmland in southern Lebanon.  

Salam also warned of an unemployment crisis, calling the 50% rate a “disaster for any economy.” He explained that "in most countries, an unemployment rate of 5–10% is significant, 20% is a disaster, and 30% is chaos. We are facing 50%, with projections that it could rise to 60–70%.”  

The government anticipates a loss of 10–15 percentage points of GDP in the coming years due to the conflict, which has inflicted $15–20 billion in damages. This figure includes not only economic losses but also the social costs of displacement, emergency relief efforts, and the destruction of homes, businesses, industries, and infrastructure.  

Lebanon’s economic crisis predates the conflict, with the country reaching a preliminary agreement with the International Monetary Fund (IMF) in April 2022 for a $3 billion aid package. However, the deal stalled as Lebanon failed to implement the structural reforms required by the IMF.  

“Today, we are in a completely different situation,” Salam said. “We are dealing with 1.5 million internally displaced people, a country ravaged by war, and major destruction of infrastructure.”