War in Gaza Threatens Economic Stability in Lebanon and Neighboring Arab States

The World Bank has warned that the ongoing Israel-Hamas war and tensions along the Lebanon-Israel border could push Lebanon's fragile economy back into recession. Prior to the conflict, Lebanon's economy was projected to grow by a meager 0.2% in 2023, but the disruptions in tourism and travel caused by the war have dampened these prospects. The World Bank now predicts that Lebanon's GDP will shrink by -0.6% to -0.9% instead. The report emphasizes the need for more sustainable and diverse drivers of growth, as reliance on tourism and remittances is not a viable long-term strategy. Lebanon has been grappling with a protracted economic crisis since 2019, and the war has further hindered its recovery efforts.