Gaza suffers ‘world’s most severe economic crisis on record’, UN says

Submitted by MEE staff on Fri, 09/25/2026 - 08:30 UNCTAD report says Israeli attacks have devastated Gaza’s economy, with $71.5bn needed for recovery and reconstruction

An Israeli flag flutters in Gaza, as seen from the Israeli side of the border, 23 September 2026 (Amir Cohen/Reuters) Off

The Gaza Strip has suffered the world’s most severe economic crisis on record following three years of Israeli genocide, according to a UN report.

The report, published on Thursday by the UN Conference on Trade and Development (UNCTAD), said intense military operations had destroyed more than 90 percent of economic establishments and displaced the entire Palestinian population in Gaza.

It estimated that $71.5bn would be needed for recovery and reconstruction.

“Gaza has experienced the world’s most severe economic crisis on record,” the report said.

“Once a permanent ceasefire is secured, the international community should immediately mobilize large-scale financial and technical support, to rebuild Palestinian productive capacities,” it added.

“A viable, sovereign, independent Palestinian State, as called for in United Nations resolutions, is a precondition for regional and global peace. Yet it cannot be built on a collapsed economy.”

The report said the Palestinian economy had been systematically stunted by decades of “de-development” under Israeli occupation.

It said Israel had imposed structural constraints on it since the occupation began in 1967.

'The destruction of public and private assets and the denial of livelihoods foster a coercive environment that forces Palestinians to leave their homeland'

- UNCTAD report

But the “cost of 59 years of occupation has skyrocketed since October 2023”.

In Gaza, “unprecedented” military operations since then brought productive activity to an almost complete halt.

The three-year genocide damaged or destroyed 92 percent of economic establishments, the report said.

Gaza’s GDP per capita stood at just $212 in 2025, equivalent to around $0.58 per person per day in GDP terms.

“At $161 in 2024, real GDP per capita was the lowest of any economy tracked through the World Bank world development indicators; by 2025, the figure had risen only marginally, to $212,” the report said.

More than 90 percent of working-age Palestinians in Gaza are now unemployed, pushing the population into “multidimensional poverty”.

The housing sector suffered the greatest damage and losses, with Israeli forces destroying or damaging nearly 90 percent of homes in the Strip.

The agricultural sector has collapsed, while the health system has been effectively destroyed, the report said.

Meanwhile, virtually all educational facilities have been damaged or destroyed, leaving 93 percent in need of reconstruction.

West Bank fragmented into ‘disconnected islands’

The UN report said the “unprecedented” destruction in Gaza had spilled over into the occupied West Bank.

It said Israel was “fragmenting the West Bank into disconnected islands”, while settlement expansion was accelerating amid a “notable shift towards formal annexation”.

Israeli policies there were preventing the development of an integrated Palestinian economy, the report said.

These included increased restrictions on Palestinian movement, ongoing home demolitions and displacement, denial of access to underground water, settler attacks on olive harvests and continued settlement expansion.

'There are two distinct legal regimes in the West Bank, one for Israeli settlers and another for Palestinians'

- UNCTAD report

Unemployment in the West Bank rose sharply after 2023, from 13.1 percent in 2022 to 31.4 percent in 2024. It then fell to 28.7 percent in 2025, according to the report.

“The destruction of public and private assets and the denial of livelihoods foster a coercive environment that forces Palestinians to leave their homeland,” it said.

“This, combined with increasing settler numbers, is gradually transforming the demographic composition of the West Bank.”

The report noted that 1,697 Palestinians were displaced in the first three months of 2026, surpassing the total number displaced throughout 2025.

“There are two distinct legal regimes in the West Bank, one for Israeli settlers and another for Palestinians, offering less protection, resulting in systematic inequality in movement, access to land, livelihoods and essential services.”

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