WASHINGTON: The ongoing war in the Palestinian territories has led to a devastating economic downturn, according to the World Bank. The Bank reported on December 16 that the conflict has decimated all sectors of the Palestinian economy, with Gaza’s economic output plunging by 86% in the first half of 2024, and the West Bank contracting by 23%. As a result, the Palestinian economy is projected to shrink by 26% in inflation-adjusted terms this year.
“The ongoing conflict in the Middle East continues to have a catastrophic impact on the Palestinian economy, pushing the territories into a crisis of unprecedented magnitude,” the World Bank stated. The war, which began with Hamas’s October 7, 2023, attack on Israel, has triggered Israel’s retaliatory strikes that have left Gaza devastated. According to Hamas-run health ministry data, at least 44,976 people in Gaza have died, the majority being civilians.
The World Bank reported a sharp decline in basic services and infrastructure in both Gaza and the West Bank. Gaza has faced a staggering 300% inflation rate over the past year, with food prices soaring by 440%, and energy costs rising by over 200%. Due to severe supply disruptions, the population in Gaza is nearing a crisis point, with 91% of its residents facing acute food insecurity. Around 875,000 people are experiencing emergency-level food insecurity, and 345,000 are at catastrophic levels.
The ongoing conflict has destroyed much of Gaza’s infrastructure, including its communications networks, despite efforts by local operators to maintain connectivity, further exacerbating the humanitarian crisis.