By Alexander Cornwell
ABU DHABI (Reuters) – Lebanon's long-troubled economy is shrouded in uncertainty by the southern border conflict between Israeli forces and Hezbollah militants, Lebanon's economy minister said on Monday.
Economy and Trade Minister Amin Salam told reporters in Abu Dhabi that Lebanon will miss an annual growth forecast of 2-4% this year as a direct result of the cross-border strikes.
“There are a lot of questions in Lebanon right now, but things are definitely deteriorating to the negative,” he said on the sidelines of a World Trade Organization (WTO) meeting.
He said it was unclear whether visitors from the Lebanese diaspora and other tourists, who he said pumped about $5 billion to $7 billion into the economy last summer, would come to the country this season.
In the most recent winter season, there were fewer overseas visitors than expected after a strong summer season before the war, he said. The United States, Brazil and Australia, home to many Lebanese, are urging their citizens to reconsider traveling to Lebanon.
“We don't really know if we can expect a summer season in the next few months that will pump billions of dollars back into the economy,” he said, unsure whether the diaspora will stay away.
Israeli forces and Lebanon's Hezbollah have been engaged in a firefight across Lebanon's southern border for months, in what the Iran-backed group says is to support its Palestinian ally Hamas.
Hamas launched a cross-border attack on Israel from Gaza on October 7, leaving about 1,200 people dead and more than 200 taken hostage, of whom about 100 were released.
In retaliation, Israel bombed and raided the Gaza Strip with the aim, the government said, of destroying the Iranian-backed Hamas, which rules the coastal enclave of about 2.5 million people. More than 29,000 Palestinians were killed in the military operations.
“Lebanon is not only affected by the war in Palestine and Gaza. Lebanon is in a state of war. We are losing our country,” Salam said.
The story goes on
Salam said the fighting on the southern border had weakened Lebanese exports, with the attacks so far damaging or destroying around $2.5 billion worth of agricultural land, trees and goods.
He said the government was seeking international help to restore farmland damaged by the fighting.
“It will take years and cost a lot of money, so we will definitely look to the international community to help us rehabilitate all areas,” Salam said.
Lebanon's economy began to collapse in 2019 after decades of wasteful government spending and corruption.
(Reporting by Alexander Cornwell, Editing by William Maclean)
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