Israeli actions reversed decades of Palestinian economic gains: UN report

A new report by the UN Conference on Trade and Development (UNCTAD) warns that prolonged Israeli military operations and long-standing restrictions have pushed the economy of the Occupied Palestinian Territory into its worst downturn on record. The agency says decades of development gains have been reversed, worsening humanitarian and fiscal pressures.

According to the report, Developments in the Economy of the Occupied Palestinian Territory, two years of conflict have driven the Palestinian economy into one of the ten sharpest global contractions since 1960.

By the end of 2024:

• GDP had fallen back to 2010 levels
• GDP per capita returned to 2003 levels

Gaza’s economy devastated

Gaza has experienced the steepest collapse. UNCTAD estimates that:

• GDP fell by 83 percent in 2024
• GDP contracted 87 percent over 2023–2024
• Economic output dropped to USD 362 million
• GDP per capita fell to USD 161, among the lowest globally.

Years of movement and trade restrictions, combined with the latest military escalation, have severely damaged essential sectors.

As the report notes, “Extensive damage to infrastructure, productive assets and public services has reversed decades of socioeconomic progress in the Occupied Palestinian Territory,” UNCTAD said.

Major impacts include:

• Destruction of infrastructure and utilities
• Damage to schools and health facilities
• Loss of productive capacity
• Widespread displacement
• Collapse of basic services

UNCTAD warns that returning to pre-2023 economic conditions could take decades, even with steady access to reconstruction materials.

West Bank faces deep economic shock

The West Bank is also undergoing its most severe downturn on record due to:

• Intensified movement restrictions
• Settlement expansion
• Limited access to land and resources
• Disrupted trade and investment

According to UNCTAD:

• GDP contracted by 17 percent in 2024
• GDP per capita fell by 18.8 percent

Fiscal pressures intensify

UNCTAD reports that the Palestinian Government faces acute fiscal strain. Between 2019 and April 2025:

• Withheld tax revenues and deductions reached $1.76 billion
• Revenue shortages limited the Government’s ability to:
• Pay salaries
• Maintain essential public services
• Stabilise institutional functions

Reconstruction needs exceed USD 70 billion

Joint assessments by the UN, European Union and World Bank estimate that rebuilding Gaza will require more than USD 70 billion.

Key challenges include:

• Years-long clearance of debris
• Removal of unexploded ordnance
• Rebuilding of housing, infrastructure and public facilities.

Call for urgent international action

• UNCTAD stresses that meaningful recovery depends on:
• A durable ceasefire
• Unrestricted humanitarian access
• Easing of movement and trade restrictions
• Restoration of fiscal transfers
• Immediate international financial assistance

The agency calls on the global community to support a coordinated recovery plan and prevent further economic deterioration.