UNCTAD Reports Gaza’s Deep Economic Collapse 2024

UNCTAD Reports Gaza’s Deep Economic Collapse 2024

Why in the News ?

A new UNCTAD assessment reveals that Gaza’s economy collapsed by 83% in 2024, pushing all 2.3 million residents into poverty, with massive infrastructure destruction and long-term developmental regression across Palestinian territories, making recovery dependent on humanitarian access, financing, and a sustained ceasefire. The report also highlights concerns about human rights violations and the need for emergency food aid in the region.

UNCTAD Findings on Gaza’s Economic Collapse:

• Gaza’s economy witnessed an 83% contraction in 2024, marking the sharpest collapse ever recorded by UNCTAD. This economic downturn has been accompanied by reports of widespread human rights violations, further exacerbating the humanitarian crisis.
• GDP fell to $362 million, with cumulative losses across 2023–24 reaching 87%, reflecting near-total economic paralysis. The situation has prompted calls for adherence to customary international law regarding humanitarian access and protection of civilians.
• GDP per capita dropped to $161, among the lowest globally, shrinking to 6.4% of its 2005 level. This dramatic decline has led to increased dependency on emergency food aid and other humanitarian assistance.
• The enclave reported inflation at 238%, severely eroding purchasing power, while unemployment soared to 80%, leaving almost all households without stable income. These conditions have exacerbated existing issues of gender-based persecution and social inequality.
• UNCTAD states that all 2.3 million residents are now below the poverty line, signalling universal impoverishment and humanitarian collapse. This situation has led to mass internal relocations as people search for safety and basic necessities.

Wider Palestinian Impact and Recovery Requirements

• By April 2025, 70% of Gaza’s structures—including factories, homes, hospitals, schools, water and energy networks—were damaged or destroyed. UN special rapporteurs have expressed grave concern over the scale of destruction and its impact on human rights.
• The West Bank is experiencing its sharpest decline due to movement restrictions, insecurity, and erosion of productive capacity. These factors have contributed to the overall deterioration of living conditions across Palestinian territories.
• By late 2024, Palestinian GDP fell to 70% of its 2022 level, returning to 2010 output levels, while GDP per capita regressed to 2003 levels. This regression underscores the urgent need for international intervention and support.
• Fiscal stress has grown as Israel withheld $1.76 billion in fiscal transfers (2019–2025), equal to 12.8% of Palestinian GDP. This financial strain has severely limited the Palestinian Authority’s ability to respond to the crisis.
• Public debt and arrears reached $4.2 billion, limiting government capacity to fund services or reconstruction. The mounting debt further complicates efforts to provide essential services and emergency aid to the population.
• UNCTAD estimates over $70 billion will be required to rebuild Gaza and stresses the need for a durable ceasefire, uninterrupted humanitarian access, and sustained international financing. These measures are crucial to address the ongoing human rights violations and provide necessary emergency food aid to the affected population.

• GDP per capita reflects average income; sharp decline suggests deepening poverty and inequality.
• Inflation at extreme levels reduces consumer capacity and destabilizes markets, typical in conflict zones.
• Human Development Index (HDI) combines life expectancy, education, and income; a fall from 0.716 to 0.643 reflects nearly 25 years of lost progress.
• Night-time luminosity, captured via satellite, is used globally as a proxy indicator of economic activity, and Gaza’s 73% decline signals extensive destruction of infrastructure and energy systems. |