Israeli wars may cost Lebanon over $27B, prime minister says

Lebanon faces economic losses that may exceed $27 billion from Israeli military campaigns since 2023, Prime Minister Nawaf Salam told parliament on Tuesday, underscoring that full reconstruction is beyond the Lebanese state's current financial capacity and will require substantial Arab and international funding.

"We must also be frank with the Lebanese people: the scale of destruction is far greater than the state’s capacity," Salam said during a general debate on government policies. "Therefore, reconstruction and recovery require, alongside state resources, Arab and international support and major external funding."

Damage estimates and composition

Salam cited World Bank estimates to quantify the toll of the conflicts that have battered Lebanon since October 2023. He said the World Bank calculated the cost of the first war, which began on Oct. 8, 2023, at around $14 billion—comprising about $7.2 billion in physical damage and roughly $6.8 billion in economic losses stemming from disrupted activity, reduced production and falling revenues.

For the more recent assault that began in March 2026, Salam said the World Bank places direct costs so far between $3 billion and $4 billion. "Therefore, the two wars together have certainly cost Lebanon more than $20 billion, and their total cost may exceed $27 billion once the cost of the 2026 war is fully calculated," he said.

• First war (from Oct. 8, 2023): total ~ $14 billion (≈ $7.2 billion physical damage; ≈ $6.8 billion economic losses)
• Latest assault (from March 2026): direct cost so far estimated at $3–4 billion
• Preliminary estimates of broader economic effects: an additional $4–5 billion

Beyond the headline numbers

Salam warned that even these figures understate the true long-term cost. He noted the estimates do not fully reflect secondary and structural impacts such as brain drain, lost investments, damage to the education sector, declines in land and asset values, and delayed recovery from Lebanon’s ongoing financial crisis that began in 2019. "But these figures do not fully reflect the real cost," he said.

The prime minister tied the prospect of securing external funding to domestic reforms and a restoration of trust. "There can be no sustainable reconstruction without funding, no funding without trust, and no trust without a capable state. Reaching a capable state, of course, requires reform," he said, framing reconstruction as contingent on both donor confidence and governance improvements.

Political and security context

Salam also stressed Lebanon did not choose the recent conflict. "We were not even asked for our opinion about entering it. It was imposed on us at a time when the deep wounds of the 2023-2024 war had not yet healed," he told lawmakers. He recalled a US-sponsored framework agreement signed in Washington on June 26 that provides for a gradual Israeli withdrawal and deployment of the Lebanese army in vacated areas, but noted that attacks and occupation of parts of southern Lebanon continue.

Outlook

With reconstruction needs far outstripping state resources, the government faces a complex task: quantify full damages, carry out reforms to build a "capable state," and marshal Arab and international financing while security risks and economic scarring—including preliminary broader costs of $4–5 billion—threaten to prolong Lebanon’s recovery. The coming months will test whether external donors, regional partners and domestic reformers can align to fund reconstruction and stabilise the battered economy.