GENEVA - UN Trade and Development (UNCTAD) has released a comprehensive report detailing the profound economic destruction that has gripped the Occupied Palestinian Territory in the aftermath of the Israeli military operation in Gaza, which followed the 7th October 2023 attacks by Hamas.

The report highlights the staggering scale of economic devastation and unprecedented decline in economic activity, far surpassing the impact of all previous military confrontations in 2008, 2012, 2014, and 2021. Inflationary pressures combined with soaring unemployment and collapsing incomes have severely impoverished Palestinian households.

The military operation led to an unprecedented loss of life, displacement, and widespread destruction of infrastructure. Meanwhile, the West Bank experienced a surge in violence, demolition of Palestinian assets, confiscations, and settlement expansions. The combined impact of the military operation in Gaza and its repercussions in the West Bank delivered an unparalleled shock that overwhelmed the Palestinian economy across the occupied Territory, including East Jerusalem.

By early 2024, between 80 and 96 percent of Gaza's agricultural assets – including irrigation systems, livestock farms, orchards, machinery, and storage facilities – had been decimated, crippling the region's food production capacity and worsening already high levels of food insecurity. The destruction also severely affected the private sector, with 82 percent of businesses, a key driver of Gaza’s economy, damaged or destroyed. The damage to the productive base has continued to worsen as the military operation persists.

Gaza's Gross Domestic Product (GDP) plummeted by 81 percent in the last quarter of 2023, leading to a 22 percent contraction for the entire year. By mid-2024, Gaza's economy had shrunk to less than one-sixth of its 2022 level.

Meanwhile, the West Bank has been undergoing a rapid and alarming economic decline. The report highlights factors such as settlement expansion, land confiscations, demolition of Palestinian structures, and increased settler violence throughout 2023-2024, which have displaced communities and severely impacted economic activities. These disruptions have affected various sectors across the West Bank, including East Jerusalem, where commerce, tourism, and transportation have suffered a considerable downturn. As a result, 80 percent of businesses in the East Jerusalem Old City have either partially or completely ceased operations.

The initial optimism of a 4 percent GDP growth in the West Bank during the first three quarters of 2023 was abruptly reversed by an unprecedented 19 percent contraction in the fourth quarter. This sharp downturn resulted in an overall annual GDP decline of 1.9 percent. Additionally, per capita GDP decreased by 4.5 percent, indicating a substantial drop in living standards and household incomes.