The United Nations Conference on Trade and Development (UNCTAD) has issued a stark warning about the economic devastation in the Gaza Strip, stating that the region is facing the most severe economic crisis in its history as a result of the ongoing Israel-Hamas war. The report highlights a dramatic 83% decline in GDP for the year 2024, with GDP per capita falling to an alarming $161, which is less than 50 cents per day, among the lowest levels globally. Additionally, the report estimates that the economy has contracted to just 13% of its size from 2022, with inflation reaching 238% and unemployment nearing 80%. All residents of the 2.3 million people in Gaza have been pushed below the poverty line.
UNCTAD emphasizes that the post-October 2023 military operations have obliterated the economic foundations of Gaza, erasing nearly 69 years of progress and thrusting the enclave into ‘the most severe crisis ever recorded.’ The destruction is extensive, with approximately 70% of structures in the enclave damaged, and rebuilding efforts are projected to require at least $70 billion and span decades.
Furthermore, the economic repercussions extend beyond Gaza, as the wider Palestinian economy, including the West Bank, has also plunged into its worst downturn on record. 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.