The Occupied Palestinian Territory is facing its deepest economic crisis ever recorded, with Gaza hit hardest by years of military operations, restrictions, and destruction. This has erased decades of progress, crushing the Palestinian economy.
In this regard, the United Nations Conference on Trade and Development (UNCTAD) has published a new report. It highlights how ‘Israel’s’ continuous military actions, combined with longstanding trade and movement barriers, have pushed the Palestinian economy into “near-total collapse”. This has caused widespread humanitarian, social, and environmental crises.
Gaza facing worst economic collapse ever recorded
Gaza is home to 2.3 million Palestinians living in just 365 km², making it one of the world’s most densely populated areas. It has seen its economy shrink by almost 85% in 2024 alone, following a sharp decline the year before. Over 2023 to 2024, Gaza’s GDP fell a staggering 87% to just $362 million. Income per person plummeted to just $161 — among the lowest in the world-representing less than 5% of the West Bank’s per capita GDP. This marks a dramatic economic decline since 1994.
This economic disaster comes after nearly two decades of severe restrictions that have choked trade and access to resources, while repeated military attacks have dismantled Gaza’s economic infrastructure. Over 174,500 buildings — roughly 70% of the territory’s structures — have been damaged, pushing Gaza into “complete devastation”.
The destruction extends beyond buildings to critical infrastructure. Cropland has been ruined and water wells destroyed. The majority of water and sanitation systems have also been damaged, causing severe water shortages and health risks. Soil contamination from explosives adds to the crisis, requiring long-term international interventions to restore even basic living conditions.
The report claims this devastation has plunged Gaza’s entire population in “multidimensional poverty”. This means people are deprived not only of income but also of essential needs such as food, healthcare, education, and safe housing.
Inflation has skyrocketed by 238%, while unemployment has soared to an unprecedented 80%, making survival a daily struggle for all its residents. Disrupted education and damaged health services threaten to undermine human capital and future development for years to come.
West Bank also facing record economic crisis
The West Bank is also enduring severe economic contraction. Over 3.3 million people face intensified restrictions on movement and access, escalating costs, and fractured markets. Since late 2023, this has led to a 17% drop in GDP and almost 20% decrease in per capita income. Expansion of Israeli settlements and movement barriers have further deepened economic hardship and social instability. Land access, economic opportunities, and essential services, have been severely limited.
The financial crisis has worsened the situation. Since 2019, the ‘Israeli’ government has withheld about $1.76 billion in tax revenues collected on behalf of the Palestinian Government. This is nearly 13% of Palestinian economy, and almost half of the government’s total income for 2024. This financial strangulation has slashed the Palestinian Authority’s ability to function properly. Public sector salaries, essential services, and humanitarian and reconstruction efforts have all been affected. Meanwhile, tax revenues have dwindled due to a shrinking economy, and international donor support has declined sharply, threatening institutional stability.
Palestinian economy—$70 billion needed to rebuild Gaza
The economic collapse has also severely damaged public services and environmental conditions. Hospitals, schools, banks, and factories have been destroyed or severely damaged, rolling back socioeconomic advancements made over decades. The report stresses Gaza’s economic freefall is the most catastrophic ever recorded. It belongs to the ten worst global crises since 1960. The humanitarian fallout continues — almost 69,800 have been killed and 170,960 injured since October 7, 2023, as of November 26. In addition, infrastructure destruction makes access to healthcare, education, food, and clean water a daily emergency.
The UNCTAD report calls for a comprehensive and immediate international response. Rebuilding Gaza alone will require investments exceeding $70 billion. This figure reflects the incredible scale of destruction and the magnitude of what must be rebuilt. Coordinated international efforts and the cessation of ‘ceasefire’ violations by the occupation, are essential for meaningful recovery. Even with substantial aid and investment, the report warns that returning Gaza’s economy to pre-October 2023 levels could take decades.
The call is urgent. Humanitarian aid must continue without delay to address the current suffering. Long-term strategies must focus on stabilizing the Palestinian economy, protecting institutions, and laying the foundation for sustainable peace and development. Without decisive international action, the Occupied Palestinian Territory risks being locked in a prolonged economic and social emergency, with devastating consequences for millions of people.
Israeli occupation must be held accountable and pay for intentional destruction of Palestinian economy and infrastructure
The immense destruction and economic devastation in Gaza and the occupied Palestinian territory have not occurred by accident. The UNCTAD report and corroborating investigations show that the occupation’s military operations—along with intentional restrictions on goods, movement, and fiscal resources—have systematically dismantled the Palestinian economy and infrastructure. This has pushed millions into deep poverty and humanitarian crisis.
The Israeli regime’s deliberate policy of extensive military attacks and crippling blockades has destroyed homes, farms, water systems, schools, and hospitals on an unprecedented scale, targeting civilian life and livelihoods. These actions have been documented by human rights bodies as violations of international law. They amount to collective punishment with devastating social, economic, and environmental consequences.
Unless the Israeli occupation is held accountable through international justice mechanisms, and compelled to pay reparations and allow the restoration of rights and resources, this cycle of destruction and despair will not stop. Without accountability, the blockade, fiscal strangulation, and military assaults will keep undermining any chance of recovery, peace, and dignity for Palestinians.
True lasting recovery and peace demand not only emergency aid and reconstruction funds but also an end to policies intentionally designed to impoverish and weaken the Palestinian people. Without these, the collapse documented by UNCTAD will be repeated, continuing the suffering for future generations. The international community must ensure that the zionist regime faces consequences and that reparations are central to all efforts going forward. This is essential not only for the Palestinians but for peace and stability in the region.
Featured image via UN trade & development
By Charlie Jaay
This post was originally published on Canary.
CEASEFIRE VIOLATION: IDF troops identified two suspects who crossed the yellow line, carried out suspicious activities, and approached the troops in southern Gaza, posing an immediate threat. The IAF eliminated the suspects to remove the threat.
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