The economic situation in Lebanon deteriorated significantly in August, exacerbated by the escalating conflict between Israel and Hezbollah in southern Lebanon. The cancellation of major concerts and international performances due to security concerns has dealt a blow to the entertainment and tourism sectors, both of which are crucial sources of revenue for the population. These industries, already weakened by Lebanon’s broader economic collapse, now face significant revenue losses, leading to job cuts and reduced local consumption.

LIMS has consistently warned about the economic repercussions of the growing conflict. If the war expands further, Lebanon risks economic paralysis. Unlike in 2006, when there was a war on a similar scale in Lebanon, the country today lacks sufficient financial reserves and international support for reconstruction. Lebanon is already grappling with a tension in the housing market, fueled by the displacement of individuals from the south of Lebanon escaping the ongoing war. This displacement has driven up rental demand, triggering sharp increases in rent prices and placing further financial strain on a population where many live below the poverty line. These rising rents are symptomatic of deeper economic distortions: a frozen housing loan market, rampant inflation due to the rapid depreciation of the pound, and a small segment of the population that can afford exorbitant rents.

Regarding the pressure exerted by displaced individuals on host communities, LIMS argued that, contrary to scaremongering, their presence is often a net positive. These displaced individuals are the true victims who were forced to flee their homes due to the war, seeking safety and stability. To compete, these individuals must be highly efficient, offering goods or services at a lower cost or higher quality than what’s already available. Alternatively, they introduce entirely new products or services that previously didn’t exist in these environments. Far from being a burden, they frequently enrich the local economy by driving innovation and increasing market diversity.

• Huge Events Lost by Beirut Due to Security Situation: What Are the Economic Implications? August 2, 2024: This Is Lebanon, Video Interview AR
• Crazy Increase in Rental Prices: Lebanese Pay a High Price for Safety, August 12, 2024: Al Hurra, Article AR
• Displaced Southerners Economically Strangled: “…And We Want to Return”, August 27, 2024: Al Modon, Article AR
• “Alarming Numbers”.. Tensions On The Southern Front Deepen The “Hunger Crisis” In Lebanon, August 30, 2024: AlHurra, Article AR
• Mardini to Sawt Beirut: If the War Expands, the Cost to the Economy Will Be Terrifying, August 29, 2024: SBI, Article AR