The World Bank estimates that Lebanon requires approximately $11 billion for recovery and reconstruction following the recent war
The 2025 Lebanon Rapid Damage and Needs Assessment (RDNA) estimates that $3–5 billion must come from public sector funding including $1 billion allocated to infrastructure sectors such as energy, municipal and public services, transportation, and water, sanitation, and irrigation.
Meanwhile, private sector contributions are expected to range between $6–8 billion, with the majority directed toward housing, trade, industry, and tourism.
The Rapid Damage and Needs Assessment report was prepared at the request of the Lebanese government and covers 10 key sectors: agriculture and food security, trade, industry, tourism, education, environmental management and debris removal, energy, health, housing, municipal and public services, transportation, and water, sanitation, and irrigation.
Breakdown
The report places the economic cost of the war at approximately $14 billion. Physical damage amounts to $6.8 billion, while economic losses, including reduced productivity, lost revenues, and increased operational costs are estimated at $7.2 billion.
The housing sector has suffered the most significant damage, with losses estimated at $4.6 billion. Trade, industry, and tourism have also been severely impacted, with total losses across these sectors reaching $3.4 billion nationwide.
Geographically, the report identifies Nabatieh and South Lebanon as the most affected governorates, followed by Mount Lebanon, which includes Beirut’s southern suburbs.
Post-war economy
From a macroeconomic perspective, the report concludes that the conflict led to a 7.1 per cent contraction in Lebanon’s real GDP in 2024, a sharp setback compared to the previously projected 0.9 per cent growth had the conflict not occurred.
As a result, Lebanon’s cumulative GDP decline since the onset of its financial and monetary crises in 2019 has reached 40 per cent, further deepening the country’s prolonged economic recession and worsening its long-term growth prospects.
Notably, in a report published three months ago, the World Bank had projected a 6.6 percent contraction in GDP due to the conflict, estimating the cumulative decline at 38 per cent at the time.
The assessment was conducted in close technical collaboration with Lebanon’s National Council for Scientific Research and coordinated with various UN agencies and other development partners.
It follows the globally recognized Post-Disaster Needs Assessment (PDNA) methodology, jointly developed by the European Union, the World Bank, and the United Nations.
This methodology has been applied worldwide in post-disaster and post-conflict contexts to guide recovery and reconstruction planning. It employs a hybrid approach, combining on-the-ground data with remote sensing technologies, including field surveys, interviews with key sources, visual inspections, satellite imagery, synthetic aperture radar analysis, anonymized mobile phone data, and social media analytics.
The widespread destruction caused by the conflict, combined with the complexities of rebuilding, highlights the urgent need for a well-coordinated response.
“Reconstructing Lebanon’s damaged housing sector cannot be achieved by one entity alone, it requires collaboration between the Lebanese government, international donors, and local organizations.” Urban Engineer and lecturer Raed Itani explained to NOW.
Effective recovery efforts must not only focus on rebuilding homes but also on ensuring that displaced families have the necessary support to return to stable living conditions.
Without a unified and strategic approach, the reconstruction process may face significant delays, leaving thousands without adequate shelter, according to Raed.
Widespread damage
The war has left widespread devastation across villages in southern Lebanon, with entire neighborhoods reduced to rubble and critical infrastructure, such as roads, water networks, schools, and health centers severely damaged or destroyed.
Thousands of homes have been either partially or completely demolished, forcing families to rent outside their villages.
While the Hezbollah has promised support to affected families, its financial capacity appears stretched due to ongoing regional conflicts and sanctions.
Academic researcher on Middle Eastern affairs at a university in Jordan Amer Al-Taamari explained to NOW: “Hezbollah has acknowledged the extensive destruction but has yet to offer a clear or comprehensive plan for reconstruction. It is unclear whether Hezbollah will be able to replicate the large-scale rebuilding efforts it led after the 2006 war.”
Many residents fear reconstruction will be slow and politicized, with limited government involvement and international aid unlikely due to political divisions and concerns over Hezbollah’s role.
Things have changed
Lebanon’s economic crisis has deepened the impact of the war, leaving communities even more vulnerable to poverty and displacement as many families had already been struggling to afford basic necessities before the war escalated.
The destruction of homes, businesses, and infrastructure has added an unbearable burden.
“People worry they will not have the financial means to rebuild their lives, as both the state and Hezbollah face severe financial constraints,” Raed explained.
The lack of savings, limited access to loans, and absence of reliable government support have left many fearing permanent displacement and long-term hardship, according to Raed.
Ahmed, a 47-year-old shop owner from Beirut’s southern suburb of Dahye, has lost both his store and home in an Israeli airstrike on the building.
Ahmed told NOW: “I built this shop with my own hands after the 2006 war, back then, Hezbollah helped us rebuild quickly. This time, I don’t know if they can. People are tired, and there’s no money like before, but we have hope in the Hezb and the Lebanese government.”
Ahmed and his family are now staying with relatives, but he worries about the future. “We need real plans, real help as soon as possible. I hope someone, anyone, steps in soon,” he said.
Rodayna Raydan is a Lebanese-British journalist. You can follow her on Twitter @Rodayna_462
The views in this story reflect those of the author alone and do not necessarily reflect the beliefs of NOW.
