A Lebanese mother described the sharp decline in one of her last sources of income, once a pillar of her financial stability, as remittances from her son abroad dwindled in the wake of the war.
“My son used to send me $600 a month. I lived on it, covered my medication and basic needs. After the war, the transfer does not exceed $200,” she told Asharq Al-Awsat.
Her account reflects a broader trend among Lebanese households, in which remittances from relatives abroad have dropped by 10% to 15% during the war. The conflict has left its mark on multiple countries, including Lebanon, driving inflation and creating obstacles to money transfers.
The financial situation was also discussed in a meeting between Lebanese President Joseph Aoun and central bank governor Karim Saeed, where current monetary and financial conditions, exchange rate stability, and precautionary measures to maintain liquidity were reviewed.
Rapid contraction and rising pressure
The issue has reached the government. Economy Minister Amer Bisat presented updated wartime estimates to the cabinet on Thursday, highlighting economic contraction and declining incomes driven by large-scale displacement, along with a notable rise in unemployment.
He cited sectoral and field studies showing deteriorating indicators, estimating the contraction at 7%-10%, coupled with slower inflows of funds into the country.
Bisat said the situation remains “relatively under control,” noting that the ministry continues to pursue cases of monopoly and fraud through dozens of reports, judicial referrals, and the seizure of non-compliant goods.
He warned that a prolonged war would heighten economic risks, describing inflation as a real challenge, while the balance of payments remains within acceptable limits.
Impact on daily life
The Lebanese mother told Asharq Al-Awsat: “I used to organize my life around the $600 my son sent me every month. I would pay for medication first, then cover household needs. Now I have to ration spending. I can no longer pay the electricity bill regularly.”
She added: “I buy smaller quantities of everything and postpone whatever I can. Sometimes I ask the pharmacy for medicine on credit. I never imagined I would reach this point.”
In the Bekaa Valley, Abu Mohammad described a similar experience: “My son used to send $400 a month, now it barely reaches $200.”
“I relied on that amount to cover rent and basic expenses. Now everything has changed. We live day to day on installments. We buy only the bare minimum and delay everything, rent, bills, even some essentials,” he said.
“Sometimes we sit together as a family to decide what we can pay this month and what to postpone. This did not exist before. Now it is part of our daily life.”
A shrinking economic backbone
Economist Walid Abou Suleiman said remittances have formed the “backbone of Lebanon’s economy since the 2019 crisis,” noting that the country relies heavily on them to secure foreign currency, as Lebanon imports about 85% of its consumer needs.
He told Asharq Al-Awsat that annual remittances are estimated at around $6 billion, including roughly $3 billion from Gulf countries, but have begun to decline, with at least a 5% drop recorded in the first month of the crisis.
“The impact of crises does not appear immediately; it builds gradually in the following months, meaning the decline is likely to worsen,” he said.
Hundreds of millions in losses
Abou Suleiman expects remittances to fall by 10% to 15%, equivalent to annual losses of between $450 million and $500 million, or about $40 million per month.
This decline is compounded by job losses among Lebanese expatriates in the Gulf, increasing domestic pressure as some return to Lebanon.
He added that the war has also affected other sources of foreign currency, particularly tourism. “Seasons that used to inject dollars into the market, such as Easter, have been absent this year,” he said, adding that rising global oil prices are worsening the crisis, as Lebanon is among the countries most affected by energy costs.
“The treasury is bearing additional burdens estimated at around 18% due to these increases,” he said.
Abou Suleiman warned that global inflation directly impacts Lebanon. “We do not only import goods, but we also import inflation with them, given the absence of local production and self-sufficiency,” he said, cautioning that the economic outlook will deteriorate further if the war continues.
Ongoing decline and uncertain outlook
Economist Professor Jassem Ajaka said remittances to Lebanon have recorded a notable decline, estimating a drop of around 5% last week, possibly rising to between 5% and 10% as conditions continue to evolve, with no precise figure due to constantly changing data.
He said the decline is logical, as Lebanese workers in the Gulf and Europe have also been affected by slowing economic conditions there.
“The crisis is no longer confined to one country or region; it is global, though its impact varies from place to place,” he said.
Ajaka stressed that remittances remain a key pillar, alongside tourism, which is largely driven by expatriates. “The tourism sector is almost entirely halted. The season can be considered lost, and even the upcoming summer season is not guaranteed. Recovery will not be quick, even if the war ends,” he said.
Tourism revenues were estimated at between $4 billion and $4.5 billion annually, making them a major source of foreign currency.
Exports are also expected to decline by around 10% due to damage to the agricultural sector in the south and Bekaa, as well as higher industrial production costs driven by rising oil prices.
Dollar inflows shrink, risks expand
Ajaka said remittances now represent the last line of resilience for many Lebanese families, but this pillar is weakening with the current decline.
He warned that the most serious consequence is a shortage of dollars in the market, raising questions about Lebanon’s ability to finance imports of fuel, food, and medicine.
A temporary solution could involve the central bank financing imports from its foreign currency reserves, he said, but this would amount to crisis management, with repercussions worsening the longer it continues.
He added that pressures are not limited to economic factors, but also include measures that restrict dollar inflows, further reducing liquidity in the market.
