Israel’s war on Gaza has devastated the Palestinian enclave’s economy, shrinking it to less than a sixth of its 2022 size, while there has also been a “significant slowdown” in the occupied West Bank, according to a United Nations report.
“Production processes have been disrupted or decimated, sources of income have disappeared, poverty has intensified and spread, neighbourhoods have been eradicated and communities and cities have been ruined,” said a report released Thursday by the United Nations Trade and Development Agency (UNCTAD).
Mutasim Elagraa, who coordinates UNCTAD’s Palestinian assistance programme, said it was not yet clear how much reconstruction would cost.
“But the evidence we have now (indicates) that it will be several tens of billions, if not more,” he told reporters in Geneva.
“It will take decades to get Gaza back to where it was in October 2023.”
Already by early 2024, UNCTAD claimed that up to 96% of Gaza’s agricultural assets – including farms, orchards, irrigation systems, machinery and storage facilities – had been “decimated.”
This has crippled food production capacity and exacerbated the already high number of people who do not have enough food to eat in the besieged Palestinian territory, he said.
Eighty-two percent of Gaza’s businesses were also damaged or destroyed.
In the last quarter of 2023 alone, Gaza’s gross domestic product (GDP) fell by 81%, leading to a 22% contraction for the year as a whole, the report said.
“By mid-2024, Gaza’s economy had contracted to less than one-sixth of its 2022 level,” UNCTAD said.
“Rapid and alarming economic decline”
The rise in violence in the West Bank has also triggered a “rapid and alarming economic decline,” the agency warned, noting that the country’s GDP contracted by 19% in the last quarter of 2023.
Since October 7, Israeli soldiers and settlers have killed at least 662 Palestinians in the West Bank, according to the Palestinian Health Ministry.
At least 24 Israelis, including security forces, were killed in Palestinian attacks during the same period, Israeli officials said.
Thursday’s report said factors such as settlement expansion, land confiscation, demolition of Palestinian structures and increased settler violence have displaced West Bank communities and severely affected economic activities.
According to UNCTAD, about 80% of businesses in the Old City of Jerusalem have partially or completely ceased operations.
High unemployment rate
Labor market conditions across the Palestinian territory have also deteriorated significantly since October 7.
The report shows that 96% of West Bank businesses have reduced their operations and more than 42% have reduced their workforce.
In total, 306,000 jobs have been lost, pushing the unemployment rate in the West Bank from nearly 13 percent before Israel launched its war on Gaza to 32 percent.
In Gaza, meanwhile, two-thirds of pre-war jobs – about 201,000 positions – had been lost by January, the report said.
The unemployment rate in the besieged territory reached 79% in the last quarter of 2023, compared to 46% in the previous quarter.