Economic Crisis Worsens In Palestine Amid Continued Conflict, Says UNCTAD

The UN Trade and Development (UNCTAD) has published a detailed report on the severe economic destruction in the Occupied Palestinian Territory following the Israeli military operation in Gaza. This operation was a response to the Hamas attacks on 7th October 2023. The report underscores the extensive economic devastation, which surpasses all previous conflicts in 2008, 2012, 2014, and 2021.

By early 2024, between 80 and 96 percent of Gaza's agricultural assets were destroyed. This included irrigation systems, livestock farms, orchards, machinery, and storage facilities. The destruction severely crippled food production capacity and worsened food insecurity levels. Additionally, 82 percent of businesses in Gaza were damaged or destroyed, further impacting the economy.

Gaza's Gross Domestic Product (GDP) experienced an 81 percent drop in the last quarter of 2023. This led to a 22 percent contraction for the entire year. By mid-2024, Gaza's economy had shrunk to less than one-sixth of its size in 2022.

The West Bank has also faced rapid economic decline due to settlement expansion, land confiscations, demolition of Palestinian structures, and increased settler violence throughout 2023-2024. These factors have displaced communities and severely impacted economic activities across various sectors.

Commerce, tourism, and transportation sectors in East Jerusalem have suffered significantly. As a result, 80 percent of businesses in East Jerusalem's Old City have either partially or completely ceased operations.

Widespread Destruction and Displacement

The military operation led to significant loss of life, displacement, and widespread infrastructure destruction. The West Bank saw increased violence, demolition of Palestinian assets, confiscations, and settlement expansions. The combined impact overwhelmed the Palestinian economy across the occupied Territory.

The initial optimism of a 4 percent GDP growth in the West Bank during the first three quarters of 2023 was abruptly reversed by a sharp downturn in the fourth quarter. This resulted in an overall annual GDP decline of 1.9 percent.

Decline in Living Standards

Inflationary pressures combined with soaring unemployment and collapsing incomes have severely impoverished Palestinian households. Per capita GDP decreased by 4.5 percent by the end of 2023, indicating a substantial drop in living standards and household incomes.

The report highlights that these disruptions have affected various sectors across the West Bank including East Jerusalem where commerce has suffered a considerable downturn.

The damage to Gaza’s productive base continues to worsen as military operations persist. The private sector has been particularly hard hit with significant damage to businesses that are key drivers of Gaza’s economy.

The comprehensive report from UNCTAD provides a stark overview of the profound economic challenges facing the Occupied Palestinian Territory following recent conflicts.

With inputs from WAM