GENEVA: The United Nations on Thursday said that Israel’s ongoing bombardment campaign has decimated Gaza’s economy, shrinking it to less than one-sixth of its 2022 level, amid an “alarming decline” in the West Bank.
The United Nations said that economic devastation has taken place at a “staggering scale” in Palestinian territories since October 7.
According to the UN Conference on Trade and Development (UNCTAD), Gaza’s economy has been decimated by Israel’s extensive bombardment campaign, reducing its economic output to less than one-sixth of its 2022 level. The report attributes this drastic decline to the destruction of agricultural assets, businesses, and critical infrastructure in the besieged territory.
Since October 7, over 41,118 Palestinians, mostly women and children, have been killed in Gaza, the territory’s health ministry. The UN rights office has corroborated that most of the casualties are women and children.
The UNCTAD report underscores the scale of the economic devastation. By early 2024, up to 96 percent of Gaza’s agricultural assets—encompassing farms, orchards, irrigation systems, machinery, and storage facilities—had been destroyed. This destruction has crippled Gaza’s food production capabilities, exacerbating food insecurity which was already severe before the conflict.
The economic toll extends to Gaza’s business sector, with 82 percent of enterprises either damaged or completely destroyed. Gaza’s GDP plummeted by 81 percent in the last quarter of 2023, leading to a 22-percent contraction for the entire year. By mid-2024, the territory’s economy had contracted to less than one-sixth of its 2022 level.
In the West Bank, the situation is similarly dire. UNCTAD warns of a “rapid and alarming economic decline” driven by escalating Israeli violence, including settlement expansions, land confiscation, and increased settler violence.
Since October 7, at least 662 Palestinians have been killed in the West Bank, according to the Palestinian health ministry.
The report highlights that 80 percent of businesses in East Jerusalem’s Old City have either partially or fully ceased operations. Initially showing promise with a 4-percent GDP growth in the first three quarters of 2023, the West Bank economy experienced a dramatic reversal with a 19-percent contraction in the final quarter, resulting in an overall GDP decline of 1.9 percent and a per capita GDP drop of 4.5 percent.
The Palestinian government’s fiscal stability is also under significant strain, with Israel withholding over $1.4 billion in Palestinian tax revenues over the past five years. This withholding, which represents more than eight percent of the Palestinian GDP last year, has compounded the economic difficulties faced by Palestinian authorities.
Labour market conditions have deteriorated markedly. In the West Bank, 96 percent of businesses reported reduced activity, and over 42 percent have cut their workforce, leading to the loss of 306,000 jobs and an increase in unemployment rates from nearly 13 percent to 32 percent.
In Gaza, two-thirds of pre-war jobs—approximately 201,000 positions—had been lost by January 2024, with unemployment soaring to 79 percent in the last quarter of 2023, up from 46 percent previously.
