Palestine’s economy teeters on the brink after year of war

The Palestinian economy has been devastated beyond recognition. Israel’s intense military operations in Gaza have led to unprecedented destruction, wiping out much of the enclave’s essential infrastructure, private property and agricultural resources.

Meanwhile, the occupied West Bank is also under severe strain. Similar patterns of destruction, alongside rising settler violence, land confiscations and expanding settlements, have left its economy buckling under the pressure of mounting public debt, unemployment and poverty.

Gaza’s economy was being suffocated even before the war. A blockade imposed by Israel in 2007 has severely restricted the import and export of goods, while fishermen were limited to a six-mile zone, crippling their ability to earn a livelihood.

The blockade caused Gaza’s GDP per capita (a measure of the wealth of a country) to shrink by 27% between 2006 and 2022, with unemployment rising to 45.3%. This gave rise to a situation where 80% of the population depended on international aid.

In addition to the economic blockade, Gaza suffered massive physical destruction due to Israeli military operations in 2008–2009, 2012, 2014, 2021 and 2022. Yet the cumulative effects of 16 years of blockade and military attacks are minor compared to the sheer destruction caused by the current war.

A report by the UN’s trade and development wing (Unctad) has revealed that in the space of just eight months, between October 2023 and May 2024, Gaza’s GDP per capita fell by more than half. The economic situation now is almost certainly worse.

According to the report, which was released in September 2024, Gaza’s GDP dropped by 81% in the final quarter of 2023 alone. The report concluded that the war had left Gaza’s economy in