The World Bank said on Thursday that all residents of the Gaza Strip suffer from poverty, with the rate reaching 100%, and indicated that inflation exceeded 250%, due to the consequences of the ongoing Israeli war on the Strip for about a year.
This came in a report issued by the bank today entitled “Palestinian Economic Update” as the Israeli war on the Gaza Strip nears completion of its first year, which has caused the displacement of about two million people.
GDP
The bank stated that the real GDP of the Palestinian territories decreased by 35% in the first quarter of 2024, which is “the largest ever,” according to the report.
“The Gaza economy shrank by 86% during this period, while the West Bank economy shrank by 25%… Unemployment in the Palestinian territories reached record levels and exceeded 50%,” he said.
The bank expected the Palestinian Authority’s funding gap to worsen, saying, “It is expected to reach $2 billion in 2024 (i.e. 3 times the gap in 2023), which poses serious risks to service provision and could lead to a real collapse.”
The halt in commercial operations in Gaza has left families without income, while prices of basic commodities have risen sharply, with inflation exceeding 250%, according to the report.
The bank continued, “The education system in Gaza collapsed, and the health system was severely damaged, as 80% of primary care centers are no longer operating… and the poverty rate reached 100%, while it rose in the West Bank from 12% to 28%.”
Financial risks
He stressed that “the conflict has led to a severe shortage of cash in Gaza, and has affected access to humanitarian aid and basic financial services.”
The bank warned of the increasing financial risks of the Palestinian banking sector, due to its increased exposure to the public sector, which has reached historic levels (the increase in the share of loans provided by banks to the Palestinian government out of the total loans provided in the market).
Banks have become the most prominent financier of the Palestinian government during the current and past two years, by providing loans either to pay part of the public sector wage bill, or to keep it able to provide services.
American support
With American support, Israel has been waging a devastating war on Gaza since October 7, leaving more than 137,000 Palestinian martyrs and wounded, most of them children and women, and more than 10,000 missing, amidst massive destruction and deadly famine.
In contempt of the international community, Israel continues the war, ignoring the UN Security Council resolution calling for an immediate halt, and the International Court of Justice’s orders to take measures to prevent acts of genocide and to improve the catastrophic humanitarian situation in Gaza.