The Palestinian economy is in free fall and will require billions to rebuild, the UN says

The Palestinian economy is “in free fall,” the United Nations reported Thursday, with production in Gaza plunging to one-sixth of its level before Israeli forces began a blistering military response to the Oct. 7 attacks in the territory.

The report from UN Trade and Development also warned of “rapid and alarming economic decline" in the West Bank, citing expanded Israeli settlements, land confiscations, demolition of Palestinian buildings and violence by settlers.

The report made no mention of corruption in Palestinian institutions,

“The Palestinian economy is in free fall,” Pedro Manuel Moreno, the agency’s deputy secretary-general, told reporters in Geneva. “The report calls for the international community to halt this economic free fall, address the humanitarian crisis, and lay the groundwork for lasting peace and development.”

That would include a “comprehensive recovery plan” for Palestinian areas, more international aid, the lifting of Israel’s blockade on Gaza, and the release of revenues and withheld funds for Palestinians retained by Israel, he said.

With violence continuing, there's little sign of any recovery plan being launched anytime soon.

Mutasim Elagraa, who coordinates the agency's assistance to Palestinians, said: “If we want to return Gaza to pre-October 2023, we need tens of billions of dollars, or even more, and decades.”

The ultimate goal is “to put Gaza on a path of sustainable development,” which will take more time and money, he said.

Economic output in Gaza plunged to just over $221 million in the half-year including the last quarter of 2023 and first quarter of 2024 — the last quarter for which figures are available — or about 16% of the total figure for the same half-year period in 2022 and 2023, when the total was just over $1.34 billion, the agency said.

Meanwhile, more than 300,000 jobs in the West Bank — home to some 3 million Palestinians — have been lost, driving unemployment rates up to 32%, up from under 13% before the conflict, the agency reported.

By early this year, as much as 96% of Gaza's farming assets, including livestock farms, orchards, machinery and storage facilities, had been “decimated,” the agency, also known as UNCTAD, said.

Over 80% of businesses were damaged or destroyed, and the damage has continued to worsen, it said.

Israel’s offensive in Gaza has killed at least 41,084 Palestinians and wounded another 95,029, the territory’s Health Ministry said. The ministry’s count does not differentiate between civilians and militants.

Israel launched its campaign vowing to destroy the Palestinian group Hamas after the Oct. 7 attack on southern Israel in which militants killed some 1,200 people and abducted 250 others.