GDP to shrink by nine percent
as per UNDP’s rapid appraisal

Unemployment to rise to 33 percent

GDP is projected to contract by 9.2 percent in 2024 under the impact of the ongoing war and assuming the fighting will continue until the end of the year, according to a rapid appraisal by the United Nations Development Programme (UNDP).

The decline in economic activity as a direct consequence of the war is estimated at $2 billion while the total economic damage would be close to that of the 2006 war which was around $2.5-$3.6 billion.



Unemployment is expected to rise to 32.6 percent from 30.3 percent.

“The war caused widespread cancellations of hotel reservations and the collapse of tourism related businesses, leading to significant job losses in this sector (five percent),” said the UNDP in its Economic and Social Consequences of the Escalating Hostilities in Lebanon-Rapid Appraisal.

Job losses in agriculture are estimated at seven percent. “Farmers and rural laborers lost jobs as agricultural production in war-affected areas plummeted. Many lost their livelihoods as the war destroyed farms and agricultural infrastructure,” the UN agency said.

The appraisal expects the exchange rate to depreciate, the Consumer Price Index to increase by six percent, and private consumption to decline by 15 percent.

The UNDP said in a statement announcing the appraisal: “Even if the hostilities were to cease by the end of 2024, the economy is likely to further contract by an additional 2.3 percent in 2025 and 2.4 percent in 2026. The medium term negative economic outlook is attributed to an expected sharp slowdown in economic activity, the anticipated slow pick-up of recovery and reconstruction efforts due to institutional weakness, in addition to significant losses in capital across all sectors, including infrastructure, buildings, factories, equipment, and utilities.”