UN Warns of Gaza's Collapsing Economy Amid Conflict

“The Palestinian economy is in freefall”, the UN Trade and Development agency warned as Gaza's economy has shrunk to less than a sixth of its pre-war size since the Israel-Hamas conflict began nearly a year ago while unemployment in the occupied West Bank nearly tripled.

The report by the United Nations Conference on Trade and Development (UNCTAD) described Gaza's economy as "in ruins" more than 11 months after Israel launched a military campaign there that has reduced much of the Strip to rubble and killed at least 41,118 Palestinians, according to the Gaza health ministry, in response to the deadly, cross-border Oct. 7 attacks by Hamas militants.

“The report calls for the international community to halt this economic freefall, address the humanitarian crisis, and lay the groundwork for lasting peace and development,” UNCTAD deputy secretary general, Pedro Manuel Moreno said.

In addition to the economic slowdown caused by the conflict, falling international aid and revenue deductions and withholdings by Israel which UNCTAD estimated at over $1.4 billion since 2019 are adding to the strain, Moreno said.

A total of more than 300,000 jobs have been lost in the West Bank since the war began, UNCTAD said, driving up the unemployment rate there from 12.9% to 32%.

UNCTAD blamed the decline on the unrest which the UN says has resulted in the deaths of more than 650 Palestinians since Oct. 7, as well as new Israeli trade restrictions such as checkpoints.

The UN trade body said the Palestinian Authority (PA), is under "immense pressure" that is jeopardizing its ability to function.

Declining international aid and revenue deductions and withholdings by Israel are also adding to the strain on the Palestinians, the report said.

Israel also routinely deducts so-called "martyr payments" paid by the PA to families of militants and civilians killed by Israeli forces.