The Israel-Hamas war has devastated Gaza, resulting in one of the worst economic crises in history, the UN has stated. According to the UN Conference on Trade and Development (UNCTAD), the enclave’s GDP dropped by 83% in 2024, with the economy shrinking to just 13% of its 2022 size. Over 70% of structures in Gaza have been destroyed, and the UN estimates that rebuilding efforts will require at least $70 billion over decades.
Gaza’s economic collapse has been amplified by the Israeli military campaign, which began in response to the Hamas attack in October 2023. The war has left the region in a dire state, with 80% unemployment, inflation at 238%, and all 2.3 million residents below the poverty line. UNCTAD highlighted that the crisis has erased 69 years of progress, pushing Gaza into the ‘most severe crisis ever recorded.’
The two years of fighting and restrictions have also driven a sharp contraction across the wider Palestinian economy, with the West Bank also sliding into its most severe downturn on record, UNCTAD said.
Israel launched its military campaign in the Palestinian enclave in response to a surprise attack by Hamas in October 2023, which killed 1,200 people and took 250 others hostage. The Hamas-run Gaza health authorities report that the ensuing Israeli operations have killed more than 69,500 Palestinians.
A US-brokered ceasefire, which took effect in Gaza on October 10, called for Israeli forces to pull back from parts of the enclave and for Hamas to free the last 20 remaining living Israeli hostages in exchange for about 2,000 Palestinian prisoners. However, Israeli airstrikes have continued despite the truce, while aid deliveries have increased only slowly, leaving conditions on the ground dire, according to UN agencies and regional mediators.