Lebanon’s remittance lifeline is exposed to the Middle East war

In Lebanon, remittances are not merely supplemental income. They are part of the country’s social safety net. And with war shaking the Middle East, this vital flow of money, much of it coming from Arab countries, particularly the Gulf, is entering a danger zone of its own. If the conflict drags on, it will not be only air routes, tourism and energy markets that come under strain. One of the last pillars keeping thousands of Lebanese families afloat will be at risk as well.

Lebanon has for years been living on financial life support. That life support has a name: money sent home by expatriates. It pays rent, fills refrigerators, finances healthcare, education and generators, and often covers daily expenses that local incomes no longer can. In 2024, remittances to Lebanon reached $6.8bn, their highest level in the available Banque du Liban series. They accounted for nearly 30 per cent of GDP in 2023 and still covered roughly 55 per cent of the trade deficit in 2024. In a country where growth remains fragile, weakening these flows would mean undermining one of the last functioning shock absorbers.

Why the Gulf matters

The risk is especially serious because Lebanon depends heavily on transfers from Arab countries, above all the Gulf. A UNDP report notes that the states of the Gulf Cooperation Council are the leading source of remittances to Lebanon, accounting for 48 per cent of the total. That number matters. It means that any sustained disruption to Gulf economies, labor markets, logistics chains or aviation would hit directly a major share of the external income supporting Lebanese households.

When host economies come under strain

The current war is no longer sparing Gulf economies. Reuters reported on March 12 that in barely twelve days, the conflict had already dealt a severe blow to the GCC’s main economies by hitting aviation, tourism, ports and logistics networks. The IMF, for its part, warned as early as March 3 that the economic fallout would depend on the duration of the war and the scale of damage to energy, infrastructure and the region’s core sectors. When the main host countries for Lebanese workers

enter turbulence themselves, the danger is straightforward: expatriate incomes become less predictable, and transfers to Lebanon may begin to slow.

A vulnerability that predates the war

That risk is far from theoretical. Banque du Liban had already flagged it before the latest escalation. In its Macroeconomic Review of June 2025, it noted that a slowdown in remittances from the GCC could weaken both Lebanon’s external accounts and household incomes, particularly in a context of moderate growth and persistent dependence on the Gulf. In other words, the system was vulnerable even before the current war. With the region now shaken by strikes, pressure on energy infrastructure and the partial paralysis of some commercial links, that vulnerability has become more acute.

Signs of weakening were already visible

The first signals were hardly encouraging even before the present escalation. According to figures compiled by Byblos Bank from Banque du Liban data, remittances from expatriates reached $4.87bn in the first nine months of 2025, down 5.3 per cent from $5.15bn over the same period in 2024. Net transfers fell by 9.3 per cent, to $3.45bn. That does not mean the system is collapsing. It does mean that it had already begun to lose momentum before the war pushed the region deeper into uncertainty.

More than a macroeconomic line item

This is where the issue becomes strategic. Remittances are not simply another entry in the balance of payments. They are a substitute for the state, a social stabilizer and a private safety net. Banque du Liban notes that

in 2024 these transfers constituted a vital source of foreign exchange and household income.

Between 2011 and 2019, they covered an average of 45 per cent of the trade deficit. In 2024, they still covered about 55 per cent. In a country where the formal economy remains anemic, reforms continue to stall and fiscal capacity is extremely

limited, losing part of this resource would not be just another piece of bad macroeconomic news. It would be an immediate social shock.

How war can squeeze remittances

War works through several channels at once. It can slow remittances through weaker host-country economies, disrupted travel and air traffic, pressure on expatriate employment, greater caution among households living abroad, and higher energy costs that erode consumption and savings capacity across the region. Reuters reported on March 19 severe damage to energy infrastructure in the Middle East and a spike in gas prices, while other analyses were already warning of inflationary shocks and large-scale logistical disruption. When all of that combines, the monthly transfer sent to family in Lebanon can become the first variable to be cut back.

The paradox is a cruel one: the more war weakens Lebanon, the more the country needs remittances; yet the more war weakens the region, the more exposed those remittances themselves become. This is the contradiction at the heart of the Lebanese model. The country produces too little, exports too little, reforms too slowly and relies on its diaspora to close the gap. The World Bank had already warned that Lebanon’s dependence on tourism and remittances is not a viable growth strategy. In normal times, it is a crutch. In a regional war, it becomes a point of fragility.

The hidden fragility of cash-based flows

It should also not be forgotten that these transfers do not all pass-through traditional banking channels. Banque du Liban indicates that in 2024, the increase in remittances was driven mainly by cash and money transfer companies, while bank transfers remained marginal. That points, on one hand, to the adaptability of the diaspora. But it also highlights the fragility of the system: when a country depends on a mass of diffuse flows, some informal or semi-formal, it becomes even harder to measure the scale of any slowdown quickly or respond to it through policy.

The future of remittances from Arab countries to Lebanon will depend largely on one question: will the war be brief or prolonged? If the shock remains contained, diaspora transfers may slow without breaking. If, however, the conflict continues to hit energy, aviation, tourism, ports and Gulf economies, the risk of erosion becomes real. For Lebanon, that would mean fewer dollars coming in, less consumption, less support for families and less capacity to absorb the domestic crisis. In a word: less oxygen.

In Lebanon, remittances do not merely support households. They help keep a precariously balanced economy standing. With $6.8bn in 2024, nearly 30 per cent of GDP, and a marked dependence on Gulf countries that supply 48 per cent of these flows, the country cannot afford for this lifeline to waver. The war shaking the Middle East today is therefore threatening not only roads, aircraft or energy markets. It is also threatening the money expatriates send home every month to their families. And in today’s Lebanon, to hit that money is to strike directly at the country’s capacity to endure.