The Israel-Hamas war has caused the most severe economic crisis in Gaza’s history, according to a recent report by the UN Conference on Trade and Development (UNCTAD). The report indicates that the enclave’s economy has shrunk to just 13% of its size in 2022. This drastic contraction has led to inflation rates climbing to 238% and unemployment nearing 80%. With these statistics, all 2.3 million residents of Gaza are now living below the poverty line.
The devastation caused by two years of fighting and restrictions has not only impacted Gaza but also the wider Palestinian economy, with the West Bank also experiencing its worst downturn in history. The conflict began when Israel launched its military campaign in response to a surprise attack by Hamas in October 2023, which resulted in over 1,200 deaths and 250 hostages being taken. The Hamas-run Gaza health authorities report that the subsequent Israeli operations have killed more than 69,500 Palestinians.
A US-brokered ceasefire, which took effect on October 10, called for Israeli forces to retreat from certain areas of the enclave and for Hamas to release the last 20 remaining Israeli hostages in exchange for around 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.