Gaza’s economy is in ruins

The Israeli military operation has caused unprecedented economic devastation and decline in the Occupied Palestinian Territories, according to a new report of the United Nations Conference on Trade and Development (UNCTAD), which estimates the Gross Domestic Product (GDP) in Gaza to have fallen by 81% in the last quarter of 2023.

By early 2024, between 80% and 96% of Gaza’s agricultural assets – such as irrigation systems, livestock farms, orchards, machinery and storage facilities – had been devastated, crippling food production capacity and exacerbating already high levels of food insecurity.

In addition, 82% of private sector businesses, a key driver of Gaza’s economy, were damaged or destroyed.

By mid-2024, Gaza’s economy had shrunk to less than a sixth of its 2022 level. Furthermore, by January 2024, two-thirds of pre-war jobs, some 201,000, had been lost, effectively pushing almost the entire population of the Strip into poverty.

West Bank

Meanwhile, in the West Bank, settlement expansion, land confiscations, demolition of structures and increasing settler violence have displaced communities and severely affected economic activities.

Key sectors such as trade, tourism and transportation in the West Bank, including East Jerusalem, have suffered a sharp decline, with 80% of businesses in the Old City of East Jerusalem partially or completely ceasing operations.

306,000 jobs have been lostwhich has raised the unemployment rate from 12.9% before the conflict to 32% today.

Fall in international aid

According to the report, the situation is aggravated by the enormous pressures on the financial stability of the Palestinian government. In 2023, support from international donors fell to a low of $358 million, compared to $2 billion in 2008.

Since October 2023, Israel’s deductions and withholdings from income have increased to more than $1.4 billion between 2019 and April 2024. These fiscal challenges have hampered the government’s ability to pay employee salaries, service debt, and maintain vital public services such as healthcare and education.

Urgent appeal

The report calls for immediate and concrete intervention by the international community to halt the economic deterioration in the Occupied Palestinian Territory, address the humanitarian crisis and lay the foundations for lasting peace and development.

This includes considering a comprehensive recovery plan, increasing international aid and support, releasing withheld revenues and lifting the blockade on Gaza.

UNCTAD stressed that Prolonged occupation remains the main obstacle to sustainable development due to persistent restrictions on investment, labour mobility and trade, which systematically undermine economic potential and exacerbate poverty and instability.