Gaza Faces Economic Catastrophe: UNCTAD Report Details unprecedented Collapse
Table of Contents
The Palestinian economy is experiencing a crisis of historic proportions, with Gaza suffering the “fastest and most damaging economic collapse ever recorded,” according to a new report from the United Nations Conference on Trade and Advancement (UNCTAD). Released on Thursday, the 2025 report paints a grim picture of devastation across both Gaza and the West Bank, fueled by decades of restrictions and recent military operations.
Gaza’s Economic Freefall
UNCTAD data reveals a staggering 83 percent contraction of Gaza’s Gross Domestic Product (GDP) in 2024 compared to the previous year. This collapse has driven GDP per capita down to just $161 annually – less than 50 cents per day – placing it among the lowest levels globally. Currently,Gaza’s economy represents a mere 13 percent of its 2022 size.
A senior economist coordinating UNCTAD’s program supporting the Palestinian people stated the situation is so severe it has “erased seven decades of human development” within the Gaza Strip.
West Bank economic Suppression
the report highlights that the West Bank economy has also been significantly impacted,contracting by 8 percent in 2024. This decline is attributed to restrictions on movement,access,and economic activity,particularly the Israeli control of 60 percent of West Bank land,which has “suppressed the economy for decades.”
The fiscal situation facing the Palestinian government is now “the worst in its history,” driven by collapsing revenues and withheld fiscal transfers – representing more than two-thirds of Palestinian tax income.
Human Capital Devastation and Reconstruction costs
The destruction of Gaza’s education system is having a catastrophic impact on future generations. The report warns that the complete destruction of all schools and universities has left children out of education for over two years, representing a loss of human capital that will harm society “for generations to come.” One analyst noted this alone represents the collapse of a quarter-century of human development, stating, “education, skills, and the entire human development base have been shattered. Gaza has lost 70 years of human development.”
Rebuilding Gaza will be a monumental task, requiring an estimated $70 billion according to joint assessments by the UN, the European Union, and the World Bank. Even under the most optimistic scenario – full access for reconstruction materials and substantial international aid – it is projected to take decades for Gaza to regain its pre-conflict economic activity. Simply clearing rubble could take 22 years, based on past reconstruction efforts, with an additional 10 years potentially needed to clear unexploded ordnance.
Ceasefire and Humanitarian Access: Essential for Recovery
all UNCTAD speakers emphasized that a durable ceasefire is a prerequisite for any meaningful economic recovery. A senior official stated the ceasefire agreed in October 2025 offers a “critical opportunity,” but cautioned that assistance must flow immediately. “Humanitarian assistance cannot wait,” he said.”A lasting ceasefire is essential to stabilize the economy and allow reconstruction to begin.”
Development can only restart when humanitarian goods can enter freely, rebuilding materials are permitted, and movement and access restrictions are eased. While recent improvements are “positive but slow, frustrating but moving in the right direction,” sustained progress is crucial.
Agricultural Sector Crippled
Gaza’s agricultural sector has been “severely crippled,” with 86 percent of cropland damaged, 83 percent of water wells destroyed, and 71 percent of greenhouses damaged. Only 1.5 percent of farmland remains usable, and 89 percent of water and sanitation facilities are destroyed. Soil contamination from explosives, both detonated and unexploded, will require significant international intervention.
The UNCTAD report underscores the urgent need for a complete and sustained response to address the economic devastation in the occupied Palestinian Territory and to lay the foundation for a more stable and prosperous future.
Image of children studying at a UNICEF safe learning center in Gaza Children in Gaza study at a UNICEF safe learning centre.
