A United Nations report has painted a stark picture of the Palestinian economy’s collapse following a month of war and Israel’s near-total siege of Gaza. The gross domestic product (GDP) in the West Bank and Gaza shrank by 4% in just the first month of the war, pushing over 400,000 people into poverty. This economic impact is unprecedented compared to the conflicts in Syria and Ukraine, or any prior Israel-Hamas war.
The war began with a surprise attack by Hamas militants, who govern Gaza, on Israel on October 7, resulting in over 1,400 deaths, mainly civilians, and about 240 kidnappings. More than two-thirds of Gaza’s 2.3 million population have fled their homes due to intense Israeli airstrikes and ongoing ground operations aimed at dismantling Hamas. The Gaza Health Ministry reports that 10,818 Palestinians, including over 4,400 children, have been killed so far.
The rapid assessment by the UN Development Program and the UN Economic and Social Commission for West Asia is the first to detail the conflict’s devastating impact, particularly on Palestinians. If the war extends to a second month, the Palestinian GDP is projected to drop by 8.4%, amounting to a loss of $1.7 billion. A three-month duration could see a 12% GDP drop, with losses of $2.5 billion and more than 660,000 people pushed into poverty.
The economic disruption is massive, with significant job losses and disruptions in key sectors like agriculture and tourism, which constitute 40% of the West Bank’s GDP. The level of destruction in Gaza is described as unimaginable and unprecedented, with extensive damage to housing and infrastructure.
The report warns of massive long-term displacement and a regression in economic development, potentially setting back the Palestinian territories by up to 19 years. This situation underscores the dire need for immediate and sustained humanitarian and economic support to rebuild and stabilize the Palestinian economy.