Gaza’s entire population has plunged into ‘multidimensional poverty,’ while West Bank faces its ‘most severe economic downturn’ on record, says UN trade body
GENEVA — A new UN Trade and Development (UNCTAD) report warned on Tuesday that prolonged Israeli military operations and long-standing restrictions have pushed the economy of the Occupied Palestinian Territory into its “most severe economic contraction” on record, wiping out decades of development gains.
The report found that two years of Israeli military operations and restrictions have “triggered an unprecedented collapse across the Palestinian economy.” UNCTAD said this downturn is unfolding against a backdrop of entrenched fragility, with severe social and environmental consequences.
According to the findings, extensive damage to infrastructure, productive assets, and public services has reversed decades of socioeconomic progress. The overall economic crisis ranks among the “10 worst globally since 1960,” while the situation in Gaza stands out as “the most severe economic crisis on record.”
UNCTAD said plummeting revenues and the withholding of fiscal transfers by the Israeli government have sharply limited the Palestinian government’s ability to maintain essential services. This comes at a moment when “massive spending is needed to rebuild shattered infrastructure and address worsening environmental and socioeconomic crises.”
By the end of 2024, Palestinian GDP had fallen back to its 2010 level, while GDP per capita returned to that of 2003, “erasing 22 years of development progress in less than two years,” the report noted.
Gaza recovery could take decades even with significant aid
For nearly two decades, Gaza’s 2.3 million residents have lived under severe restrictions on movement, trade, and access to resources. Recurrent Israeli military operations and limits on goods and productive inputs have dismantled the enclave’s economic base.
Gaza’s GDP fell 83% in 2024 compared to 2023, totaling an 87% drop over two years to $362 million. GDP per capita dropped to $161, “among the lowest globally.” UNCTAD warns that disruptions to education, health care, and basic services will have long-term effects on human capital.
Recovery, even with significant aid, could take decades. The report emphasized that “to enable any meaningful recovery… the international community must secure the durability of the ceasefire achieved in October 2025,” while stressing that humanitarian aid “cannot wait.”
The report detailed how settlement expansion and movement restrictions continue to fragment the West Bank, affecting over 3.3 million people. Intensified constraints since late 2023 led to a 17% contraction in GDP and an 18.8% drop in GDP per capita, marking the territory’s “most severe economic downturn on record.”
UNCTAD warned that fiscal pressures have sharply escalated due to withheld revenues, declining donor support, and the contracting economy. Between January 2019 and April 2025, deductions and withheld transfers totaled $1.76 billion, or 12.8% of 2024 GDP.
The report estimated that Gaza’s reconstruction and recovery needs would exceed $70 billion. It called for urgent, coordinated international action to halt the economic freefall, restore fiscal transfers, ease restrictions, and develop a comprehensive recovery plan for the territory. — Anadolu Agency
