Gaza’s economy endures worst collapse ever recorded, UN reports

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A report indicates that approximately 70% of the buildings in the Palestinian territory have been devastated by the two-year conflict between Israel and Hamas.

The UN Conference on Trade and Development (UNCTAD) has released a report stating that Gaza is experiencing its most severe economic downturn ever recorded, following two years of warfare between Israel and Hamas that have ravaged the Palestinian enclave.

This week, the UN trade agency reported an 83% drop in Gaza’s GDP in 2024 compared to the previous year, with GDP per capita plummeting to an annual $161 – less than 50 cents daily – placing it among the lowest worldwide.

UNCTAD’s estimates show the economy has contracted to merely 13% of its 2022 volume, accompanied by 238% inflation, nearly 80% unemployment, and all 2.3 million inhabitants forced into poverty.

“Military actions subsequent to October 2023 have dismantled Gaza’s economic infrastructure, transforming it from a state of de-development into complete devastation,” UNCTAD noted, further stating that this crisis has undone 69 years of advancement and driven the enclave’s economy into “its worst crisis on record.” 

The report also states that roughly 70% of all structures within the enclave have sustained damage, and the reconstruction of Gaza is projected to require a minimum of $70 billion and span several decades.

UNCTAD also highlighted that the two years of conflict and restrictions have led to a significant contraction across the broader Palestinian economy, with the West Bank experiencing its deepest recession on record.

Israel initiated its military offensive in the Palestinian territory following a surprise Hamas assault in October 2023, which resulted in 1,200 deaths and 250 individuals being taken hostage. Gaza’s Hamas-controlled health authorities claim that subsequent Israeli operations have caused over 69,500 Palestinian fatalities.

A ceasefire, mediated by the US and implemented in Gaza on October 10, stipulated that Israeli forces withdraw from certain areas of the enclave and that Hamas release the last 20 surviving Israeli hostages in return for approximately 2,000 Palestinian detainees. Nevertheless, UN agencies and regional mediators report that Israeli airstrikes have persisted despite the agreement, and aid supplies have risen sluggishly, resulting in severe conditions on the ground.