Gaza is reeling from the devastating consequences of a month-long war with Israel, as a United Nations report warns of the unimaginable levels of destruction and the impending economic crisis. The conflict has taken a severe toll on the Palestinian economy, pushing hundreds of thousands of people into poverty and causing a significant decline in the gross domestic product (GDP).
According to the report released by the UN Development Programme and the UN Economic and Social Commission for Western Asia (ESCWA), poverty in Gaza has increased by 20 percent since the war began, while the GDP has declined by 4.2 percent. These economic impacts surpass those seen in conflicts such as Syria and Ukraine, as well as previous Israel-Palestine wars.
The consequences of the war have been devastating. At least 10,800 Palestinians have been killed in Gaza, and more than two-thirds of the population, totaling 2.3 million people, have been displaced from their homes due to Israel’s blockade and the relentless air strikes and ground assault. Violence has also spread across the West Bank, with 182 Palestinians killed and over 2,250 injured.
If the war continues for another month, the UN projects a further drop in Palestinian GDP by $1.7 billion, or 8.4 percent. In the worst-case scenario of the conflict stretching into a third month, the economy is expected to shrink by 12 percent, resulting in losses of $2.5 billion and pushing more than 660,000 people into poverty.
The economic impact is unprecedented, with the potential for a massive 12 percent GDP loss by the end of the year. Comparatively, the Syrian economy lost 1 percent of its GDP per month during the height of its conflict, and Ukraine took a year and a half to lose 30 percent of its GDP. The Palestinian territories were previously considered a lower middle-income economy with a poverty level of $6 per day per person.
Even before the war, Gaza was already grappling with high unemployment, with rates at around 46 percent, significantly higher than the West Bank’s 13 percent. The conflict has further exacerbated the unemployment crisis, resulting in the destruction of approximately 390,000 jobs in just four weeks. Gaza has been hit the hardest, with an estimated 61 percent of employment lost, equivalent to 182,000 jobs, while the West Bank has lost about 24 percent of employment, equivalent to 208,000 jobs.
The war has also caused massive disruptions to various sectors, including agriculture, tourism, trade, and the transfer of money from Israel to the Palestinian Authority, which controls the West Bank. The destruction in Gaza is described as unimaginable and unprecedented, with an estimated 35,000 housing units completely demolished and 220,000 units partially damaged. Satellite images reveal the destruction of over 36 percent of greenhouses and damage to more than 1,000 fields.
The consequences of this ongoing conflict are dire and will have long-lasting effects. UNDP administrator Achim Steiner warns that the development setback in the Palestinian territories could extend well over a decade, even under the most conservative scenario. The UN assessment suggests that the human development index, which measures life expectancy, education, and standard of living, could roll back to 2007 levels in the worst-case scenario.
The situation in Gaza demands immediate attention and action from the international community to alleviate the suffering of the Palestinian people and work towards a lasting resolution to the Israel-Palestine conflict. Failure to address the crisis could have devastating humanitarian, economic, and security consequences for years to come.
