The IMF’s Jihad Azour emphasizes the need for international assistance to Lebanon amid ongoing conflicts and severe economic decline, predicting a 9.2% GDP loss. With 1.2 million displaced, he calls for humanitarian aid and donations to protect lives and livelihoods. The IMF has lowered regional growth forecasts due to conflicts in Gaza and Lebanon, while the economic effects vary across neighboring countries. Azour advocates for better regional integration to enhance resilience and attract investment for post-conflict recovery.
The ongoing conflict has significantly affected Lebanon, and international support is crucial for alleviating its economic challenges. Jihad Azour, the IMF’s director for the Near East, emphasized the need for “donations” and diplomatic efforts to stabilize the situation. He pointed out that the wellbeing of citizens must be a priority, stating, “The priority is to protect lives and save people’s livelihoods, but also to provide sufficient humanitarian aid to those who have lost everything.” Currently, around 1.2 million individuals—about a quarter of Lebanon’s population—are displaced.
Azour called on the global community to address the escalating humanitarian crisis resulting from the conflicts in Gaza and Lebanon. He encouraged international allies to contribute financially to Lebanon, which was grappling with economic difficulties even before tensions escalated. He urged, “We call on the international community to do everything possible to end the conflict and reduce the suffering of the population.”
According to the United Nations Development Program (UNDP), Lebanon’s economy is projected to suffer a 9.2% loss in GDP under current conflict conditions. The IMF, however, has refrained from issuing a growth prediction for Lebanon for 2024 and 2025 due to the unpredictable situation. Azour explained, “There is significant destruction of infrastructure, the devastation of agricultural regions in the south, loss of human lives, and widespread disruptions to economic activities.”
Economic Impact Analysis
In a broader context, the IMF has revised its regional economic forecasts downward by 0.6 percentage points from earlier predictions made in April, largely due to the ramifications of the ongoing fighting. Azour noted that while some nations have managed to mitigate impacts, the effects vary significantly across the region.
For instance, Jordan has felt the strain on its tourism sector, a challenge not faced by Egypt, which is contending with a 70% revenue decline from the Suez Canal—resulting in losses between $6 billion and $7 billion. Syria remains one of the most adversely affected countries, yet the IMF has not analyzed its situation for 15 years, leaving a gap in data on the economic fallout.
Contrarily, Egypt is better positioned to weather these challenges, aided by an extended IMF program that increased support from $3 billion to $8 billion in April to provide coping strategies. Azour observed that, “The Fund’s approach is flexible. But on the whole, economic indicators are improving: growth will accelerate next year and inflation is slowing down.” This optimism comes despite an initial plunge in the value of the Egyptian pound due to recent exchange rate liberalization.
Azour also highlighted that, although Egypt and other regional nations are experiencing “post-conflict economic performance that is generally weaker than other conflict-affected regions,” it’s imperative to foster stronger recovery strategies. This includes promoting better regional integration and leveraging opportunities to combat climate change and adopt new technologies to attract further investment—a strategy that should also extend to the Gaza Strip and the West Bank.